The mobile services and applications in Japan and Korea were implemented earlier than other countries and their mobile operators are the global pioneers. The 3G services in Japan and Korea have highly developed and their penetration rate is also extremely high. They have accumulated successful experiences on various mobile services and applications, and have become the paradigm for the mobile communication industry.
This study measures the operational efficiency of six major mobile operators in Japan and Korea, including NTT DoCoMo, KDDI, Softbank Mobile, SK Telecom, KT Freetel and LG Telecom over the time period 2002-2006. In the setup of efficiency measures of the data envelopment analysis (DEA), outputs are voice and data revenues and inputs include the number of employees, total assets, and capital expenditures. Then, the Tobit regression is used to analyze the impact of possible influential factors, including geographical area, service quality, competition degree, 3G network type, the ratio of 3G subscribers, and the ratio of data service revenues on efficiency of mobile operators.
The empirical results can be summarized as follow. First, overall Japanese mobile operators are more efficient than Korean mobile operators. It is because the usage of data services in Japan was higher, and WCDMA service was not implemented successful in the early stage in Korea. Next, the operators with great revenues do not necessarily achieve operational efficiency. It indicates that the efficiency also can be achieved by operators with smaller operating scale. This is because large operators maintain the large sustaining amount of input resources and bear the regulation from the authority. Further, the leading role in the industry forces them have to develop new technology and provide new network system ahead of the rivals. Further, the investments on the network and other relative equipments seem to make the operators inefficient. This is because the return of these investments might not quickly be reflected on the operators’ revenues. Finally, the Tobit results show that the above six possible influential factors all have a significant effect on the efficiency of operators in this study. Namely, geographical area, service quality and ratio of data service revenues positively affect the efficiency of operators, and competition degree, 3G network type and ratio of 3G subscribers negatively affect the efficiency of operators.

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