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The impact of ICTs on the efficiency of the different national telecommunication industries of the U.S., Germany, France, the UK and the Netherlands is analysed by using a stochastic production possibility frontier approach. By determining the technology efficiency effect frontiers for each single country, one obtains a measure for the evolution of relative inefficiencies over time for each country's industry. The time period covered by the data include a time when the deregulation of the telecommunication industries in these countries took place and the rapid diffusion of two key innovations - the internet and mobile communications - changed the technological and organisational foundations everywhere. The results show that even if the U.S. telecommunication industry led this wave of major innovations as a first mover, thus diminishing its relative efficiency disadvantage versus Europe, the EU countries still maintain a comparative efficiency advantage inherited from the early 1980s. Inefficiency differences between national telecommunication industries on the whole have decreased in the long-run. Differences in the capability to establish and maintain a competitive and innovative national industry, however, still prevail between these countries, even if they have become less pronounced.

Benchmarking Efficiency of Telecommunication Industries in the US and Major European Countries - A Stochastic Possibility Frontiers Approach