Evaluating the technical efficiency of Saudi Arabian telecommunications companies using window DEA and AHP techniques

Abstract

Purpose

This study aims to evaluate the efficiency of the three telecommunications companies in Saudi Arabia: Saudi Telecom Company (STC), Mobily and Zain over the period of 2010–2019. This evaluation is a step toward improving the performance of the Saudi telecommunications sector.

Design/methodology/approach

Three multicriteria decision-making (MCDM) techniques were used to calculate technical efficiency. These techniques include the traditional data envelopment analysis (DEA), window DEA and analytical hierarchy process (AHP). The three inputs used were total assets, operating expenses and capital expenditures, whereas the two outputs were sales revenue and total stockholders’ equity.

Findings

STC was ranked first using the three techniques, followed by Zain, and then Mobily. According to the DEA window analysis, these three companies were all efficient only in 2012. The efficiency was high in the initial years, 2010–2013, when it was above 0.90, and it dropped below 0.90 in the subsequent years, 2014–2019. In addition, the efficiency of STC remained high, with an average of 0.990. However, the average efficiencies of Zain and Mobily during this period were 0.807 and 0.804, respectively.

Originality/value

This is the first study to use the three MCDM techniques to evaluate the performance of telecommunications providers. The results show that window DEA is better than the other two techniques at evaluating performance over time, as it has a higher discrimination power than either the traditional DEA or AHP.

Citation

Abdel-Halim, A., Al Khars, M. and Alnasser, A. (2023), "Evaluating the technical efficiency of Saudi Arabian telecommunications companies using window DEA and AHP techniques", International Journal of Islamic and Middle Eastern Finance and Management, Vol. 16 No. 6, pp. 1306-1325. https://doi.org/10.1108/IMEFM-02-2023-0043