The paper analyzes operational efficiency of six major mobile operators in Japan and Korea over the time period 2002-2006 and the impact of possible influential factors on the efficiency. The empirical results reveal that overall Japanese mobile operators are more efficient than Korean mobile operators and that the operators with significant revenues do not necessarily achieve operational efficiency. Korean operators are almost situated in increasing returns to scale, whereas Japanese operators are in decreasing returns to scale except Softbank Mobile. Finally, geographical area, service quality, degree of competition, 3G network type, ratio of data service revenues, and ratio of 3G subscribers all have significant effects on the efficiency of operators.
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