The Metric System of Social Benefit Evaluation of
Telecommunications Industry
Luona Song
1
, Tingjie Lv
2
, Xia Chen
3
, Xi Yang
4
and Cong Gao
5
School of Economics and Management, Beijing University of Posts and Telecommunications, No.10 Xitucheng Road,
Haidian District,Beijing, China
Keywords: Social Benefit Evaluation, Telecommunications Industry, Index System.
Abstract: “Build resilient infrastructure, promote inclusive and sustainable industrialization, and foster innovation” is
one of the 17 goals made in the 2030 Agenda for Sustainable Development formally adopted by the 193-
Member United Nations General Assembly last September. More exactly, dramatically improving access to
information and communication technology has been highlighted as the main target to achieve, and
telecommunications industry plays a vital role in this area. However, with the continuous development of
broadband infrastructure deployment, a huge number of Internet applications have played a dual role in
grasping and stimulating the revenue of telecom service providers simultaneously. Because of the lack of a
method system which can evaluate social benefits of telecommunication service industry, its fundamental
role of promoting the development of the Internet economy, as well as its positive contributions such as
increasing employment opportunities has not been widely accepted in Chinese society. This paper proposes
a system for CSPs to conceptualization, measurement and quantification their social contribution under the
environment of broadband internet and gives advice on how to perfect the present performance evaluation
of national basic industries.
1 INTRODUCTION
With the rapid promotion of mobile Internet and the
increasing popularization of Wireless Fidelity
(WIFI) both as conveniently available platforms for
instant communication, entertainment and
commerce, the role of Communication Service
Providers (CSPs) in China has shifted to a bland toll
collector position in the Internet era. In the
meantime, a range of issues appeared within these
enterprises, such as the decrease of innovation
capability and the outflow of talent. In addition, the
public also complained about their high charge and
low quality of broadband and mobile broadband
services. Therefore, the government and the Industry
stakeholders alike are concerned about how these
state-owned telecommunication operators are going
to reform their operation mode and performance
review in the future. This discussion on the future of
CSPs has many facets and one of the key issues is
industry contribution assessment. Like many project
appraisals it is too much often focused on direct and
monetized values rather than a close analysis of
indirect, social or public contributions. This paper
provides an index system to evaluate and measure
social benefits for telecommunications industry. To
begin with, it is important to review some facts
about Chinese CSPs and their operation, in order to
be able to understand the developing situation of the
industry.
In China, Communication Service Providers
(CSPs) or telecom operators usually refer to state-
owned enterprises providing fixed telephone, mobile
phone and Internet access services. At present, there
are four leading telecom operators which are China
Mobile, China Unicom, China Telecom and SARFT
(State Administration of Radio, Film, and
Television, authorized in 2016). According to the
bulletin of Communication Operation Statistics in
2015, there were 1.3 billion mobile phone users and
4G user made up for 29.6% of the total. The
consumption of Mobile Internet access traffic were
4.187 billion G (Giga), with year-on-year growth of
335
Song L., Gao C., Yang X., Chen X. and Lu T.
The Metric System of Social Benefit Evaluation of Telecommunications Industry.
DOI: 10.5220/0006450003350340
In ISME 2016 - Information Science and Management Engineering IV (ISME 2016), pages 335-340
ISBN: 978-989-758-208-0
Copyright
c
 2016 by SCITEPRESS – Science and Technology Publications, Lda. All rights reserved
335

103%. Monthly mobile Internet access traffic per
capital reached 389.3 M (Mega), with year-on-year
growth of 89.9%. In 2015, three CSPs (China
Mobile, China Unicom, China Telecom) had a total
of 213 million fixed broadband Internet users.
Among them, the subscribers of optical fiber access
(FTTH / 0) were 120 million, accounting for 56.1%
of the total number of broadband users. Broadband
users of “8 M plus” and “20 M plus” bandwidth
accounted for 69.9% and 33.4%. The usage of Fixed
Internet at the same time maintained rapid growth,
and the access time of fixed broadband were 50.03
trillion minutes, with year-on-year growth of 20.7%.
Thus it can be seen that the revenue from voice calls
and text messaging are falling gradually, while the
access and usage of the Internet, especially Mobile
Internet, are becoming the core income.
It is an irreversible trend that the services offered
by telecom operators are experiencing the evolution
from final consumption goods to intermediate
products (Xiuqing Huang et al, 2012).
Unfortunately, because of the lack of a method
system which can evaluate social benefits of
telecommunication service industry, its fundamental
role of promoting the development of the Internet
economy, as well as its positive contributions such
as increasing employment opportunities has not been
widely accepted in Chinese society. This paper is
thus organized along the following central questions:
what are the connotation of the social welfare of
CSPs when the Internet become an indispensable
part for human lives? And how to build an
evaluation index to measure those contributions? It
can be said in advance that this paper will not pay
special attention on perceptual or subjective
experiences from consumers when discussing these
questions. Rather, the paper is meant as an objective
and data-based study that deals with direct and
indirect social benefits and provides a guideline for
CSPs on how to detail their operation and evaluation
metrics.
2 LITERATURE REVIEW AND
THE CONNOTATION OF
SOCIAL BENEFIT
Despite a rising number of studies calculating in
great detail about the direct and indirect economic
contributions made by the ICT investment, less
attention has been paid to the social benefit
contributed by telecommunications. Firstly,
domestic scholars have failed to reach consensus on
the connotation of social benefit and the dispute is
mainly at the boundary of social benefit, economic
benefit and ecological benefit. Secondly, available
research on evaluation index system of social benefit
is diverse and more concentrates on projects in the
fields of expressway, journalism and forestry.
Furthermore, present quantitative evaluation
methods of social benefit domestic and overseas
includes system dynamics method, structural
equation modelling (SEM) techniques (T. J. Gerpott
et al, 2015) and input-output analysis and it has been
applied to industry level and corporate level, such as
competitive analysis. Nevertheless, there hasn't been
much scientific studies on the foundational telecom
industry contributing to social development under
the era of mobile internet yet. Therefore, it is
necessary to carry out systematically research on the
issue of measuring and evaluating telecoms’ social
benefits.
Based on a wide range of literature reading on
the present papers, in this paper, a strict definition of
Social Benefit on industrial level is described as
follows:
Definition 1: Social Benefit refers to all aspects
of social progress result from the development of
certain industries.
When comes to Telecommunications Industry,
social welfare means the improvement of access to
information and communication brought by the
promotion of infrastructure and the updating of
communication technology. Like other benefits such
as economic and ecological, Social Benefit also
could be divided into two parts that are direct and
indirect values (V. D. W. Marlies et al, 2015). With
the development of Broadband and Mobile
Broadband, the internet has replaced voice calls and
text messaging to some extent since internet
applications such as instant communication and
email become the dominant tools to live and work.
Moreover, people are able to get these
telecommunication services regardless of time and
place. In other words, the wide spread of network
signal expands the space of handling official
business, getting entertainment and obtaining
information. These are all direct values comes
straight from the development of CSPs. In addition,
the presence of the internet is the essential condition
for the development of Internet enterprises, such as
Baidu, Tencent and Alibaba. The promotion of
Mobile Internet contributes to the booming of
applications satisfying the diverse demands of users.
Furthermore, the overall enhancement of the levels
of Information and Communication will create
social economic value and provide more
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opportunities of employment generally. And all
these welfare are indirect.
In short, four aspects account for the Social
Benefit of Telecommunications Industry. The first
key term is cost. The development of the
telecommunications industry and the advent of
mobile Internet era have greatly reduced the cost to
communicate. Secondly, the improvement of
serviceability broadens human activity space.
Thirdly, the stability of the Internet lead to the
creation of various internet products and business
models. Finally, social productivity and employment
are influenced by this industry.
3 LITERATURE REVIEW AND
THE CONNOTATION OF
SOCIAL BENEFIT
The Index of Social Benefit consists of four sub-
indexes which are Cost Value, Spatial Value,
Functional Value and Creation of social Value (Feng
Luo, 2013). Under each sub-indexes, there are two
to three indicators. These indicators represent a
selective subset of the full set possible with other
indicators were omitted owing to limited data
availability or difficulties in their measurement.
Required data are selected from Ministry of Industry
and Information Technology of the People's
Republic of China (MIIT), China Internet Network
Information Center (CNNIC) and National Bureau
of Statistics (NBS).
3.1 Social Benefit Indicators
3.1.1 Cost Value
Definition2: Cost value refers to values produced by
the decrease of communication cost.
Before the wide spread of 3rd-Generation, fixed
and mobile phones are some of the main means
people used to communicate the work contents and
contact with their families and friends. And there are
certain limitations. A long-distance call is usually
expensive and has high possibility of getting a busy
signal. Moreover, frequent telephone
communication also generates a mass of fees.
However, all these limitations are greatly improved
in the era of Mobile Internet. It is undeniable that the
costs of communication, working, time spending are
all reduced. This introduces a broader definition of
the factors influencing the costs of new
communication technology, beyond narrow
monetary costs.
This paper considers Cost Value from a more
practical substitution perspective. Hence, Fixed
Long-Distance Call duration in total, Mobile Call
duration in total and Mobile Message in total are
selected to be indicators describing the Cost Value
of telecommunications. Reasons why these
indicators could be the most suitable are explained
as follows. Traditional voice and text message
services are gradually replaced by the Internet
services. Events and notification, used to rely on text
messages and telephones, especially long-distance
phone calls, are now solved easily by Internet
applications, such as emails or WeChat.
Furthermore, communication fees of recent years are
unable to describe the decrease of
telecommunication cost and are difficult to obtain or
separate from traditional business units.
3.1.2 Spatial Value
Definition3: Spatial Value refers to values produced
by the differences of spatial location.
Table 1: Construction of Social Benefit Indices
Dimension Index Indicators Source
Direct
Cost Value
D1:Fixed Lon
g
-Distance Call duration in total MIIT
MIIT
MIIT
D2:Mobile Call duration in total
D3:Mobile Messa
g
e in total
Spatial Value
D4:The number of Internet broadband access port
D5:The number of base stations for 3G and 4G
MIIT
MIIT
D6:The len
g
th of Optical fiber cable line MIIT
Indirect
Functional Value
I1:The number of Domain name and Website CNNIC
I2:The number of users of All kinds of Internet
applications
CNNIC
Creation of social
Value
I3:Gross Domestic Product (GDP) NBS
I4:The number of employments in the third industry NBS
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With the development of information technology
and network, enterprise management activities as
well as social communication activities began to
break the limitation of time and space. In this
process, the value of telecommunication are mainly
embodied in the convenience and flexibility of
access to related services. Therefore, Spatial Value
focuses on whether communication networks are
covering more and more living and working spaces
and whether high-quality services could be obtained
flexibly at different scenarios.
This paper considers Spatial Value from a more
measurable capability perspective. Hence, the
number of Internet broadband access port, the
number of base stations for 3G and 4G and the
length of Optical fiber cable line are selected to be
indicators describing the Spatial Value of
telecommunications. Reasons why these indicators
could be the most suitable are explained as follows.
The increase of base stations on the one hand
indicates extending the coverage and enhancement
of signal. Similarly, the greater the number of access
ports, the more population benefit. The personal
computers and mobile telephones also become key
components for Internet access since 3Generation,
4Generation and Wireless Fidelity access become
widely available. However, without the continuous
investment on infrastructures, the increase of mobile
phone penetration rates doesn’t represent the
promotion of ubiquity and convenience of
telecommunications.
In summary, direct social benefits focuses on
values that directly produced by the activities of
telecom operators.
3.1.3 Functional Value
Definition4: Functional Value refers to values
offered by Internet enterprises based on the
continuous development of the Internet and Mobile
Internet.
Functional Value focuses on the booming of
Internet industry, relating to digital content, e-
commerce, mobile Internet and so on. And the rapid
development of various Internet applications implies
increased ability to discover, serve and satisfy
human demands. In other words, people’s living
demands as well as business needs will be highly
fulfilled as long as they connect with the Internet or
Mobile Internet.
This paper considers Functional Value from a
market performance perspective. Hence, the number
of Domain name and Website and the number of
users of all kinds of Internet applications are
selected to be indicators describing the Spatial Value
of telecommunications. Reasons why these
indicators could be the most suitable are explained
as follows. Number of Domain name and Website
has been taken as a measure of the richness of
information resources, Increasing number of website
implies increased demand of the Internet. The
change of usage rates reflects the importance degree
of certain demands in consumer’s daily lives. This
paper considers four kinds of applications as the
core demands of using the Internet. The first kind of
applications is instant messaging (IM). For instance,
by the end of the third quarter of last year, monthly
active users of WeChat has reached 650 million and
this number would continue to increase in the future.
The second one is online payment. In fiscal year of
2014, a total payment of 3.87 trillion yuan was
accomplished by Alipay. Moreover, an increasing
number of offline shops, relating to dining,
entertainment and convenience stores, are accepting
online payment.
The last two applications are online shopping
and Network Video (NV).
3.1.4 Creation of Social Value
Definition5: Creation of Social Value refers to social
productivity and employment influenced by
telecommunication industry.
This paper considers Creation of Social Value
from a more abstract perspective. Hence, GDP per
capital and the number of employments in the third
industry are selected to be indicators describing
Creation of Social Value of telecommunications.
Communications services are creating great material
wealth and improving the overall social productivity.
As mentioned in Functional Value, the booming of
Internet-related companies creates more
employment opportunities, especially for the tertiary
industry.
3.2 Index Methodology
Since significant Internet and Mobile Internet
diffusion is observed domestically only in the past
few years. This paper therefore compiled indicators
and calculated indices from 2010 to 2015. Moreover
，units of analysis are National Level and national
level statistics are collected.
Scores are derived as an index relative to the
maximum and minimum achieved in any Indicator:
Index score = (Value – Minimum)/
(Maximum – Minimum)
(1)
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4 DISCUSSION OF RESULTS
Results in this section are presented as follows:
Table 2: Index Score of Cost Value
Year D1 D2 D3 In total
2010 1.00 0.00 0.65 1.65
2011 0.64 0.48 0.91 2.03
2012 0.37 0.80 1.00 2.17
2013 0.18 0.97 0.97 2.12
2014 0.08 1.00 0.34 1.43
2015 0.00 0.91 0.00 0.91
The Table 2 shows that social contributions from
traditional telecommunication business have
fluctuated in recent years, but a downward trend is
observed and indicates the decrease of
telecommunication cost.
Table 3: Index Score of Spatial Value
Year D4 D5 D6 In total
2010 0.00 0.00 0.00 0.00
2011 0.16 0.14 0.07 0.37
2012 0.47 0.32 0.03 0.82
2013 0.60 0.50 0.06 1.17
2014 0.76 0.70 0.71 2.18
2015 1.00 1.00 1.00 3.00
The Table4 shows that Spatial Value of
telecommunications have improved in the last few
years. Furthermore, the latest 3year’s annual
increment are significantly more than the former
years’.
Table 4: Index Score of Functional Value
Year I1 I2 I3 I4 I5 In total
2010 0.02 0.00 0.00 0.00
0.00 0.02
2011 0.00 0.23 0.07 0.11
0.19 0.66
2012 0.24 0.42 0.03 0.30
0.40 1.69
2013 0.46 0.66 0.06 0.44
0.66 2.78
2014 0.55 0.87 0.71 0.60
0.68 3.49
2015 1.00 1.00 1.00 1.00
1.00 5.00
Table 5: Index Score of Creation of Social Value
Year I6 I7 In total
2010 0.00 0.00 0.00
2011 0.28 0.19 0.47
2012 0.47 0.27 0.73
2013 0.67 0.65 1.32
2014 0.85 0.98 1.83
2015 1.00 1.00 2.00
Similarly, Functional Value and Creation of
Social Value of telecommunications have also
promoted as time passed.
Table 6: Index Score of Direct and Indirect Welfare
Year Direct Indirect In total
2010 1.65 0.02 1.67
2011 2.40 1.12 3.53
2012 2.99 2.42 5.41
2013 3.29 4.09 7.38
2014 3.60 5.32 8.93
2015 3.91 7.00 10.91
The Table 6 shows the total index score of social
benefit. Comparing with the base or beginning year
2010, the social contribution of telecommunications
almost increased tenfold in 2015. This suggests that
the enhancement of telecommunications indeed has
created social value and the indirect part should be
taken seriously.
5 CONCLUSIONS
Under the age of Mobile Internet, core business of
telecommunications has shifted to access and usage
of the Internet. However, the concern of telecom
operators still focuses on direct values, especially
traditional communication services. Hence, Internet-
related indicators should be further refined.
Moreover, comparing with traditional income
contributed by fixed calls, mobile calls, text message
as well as other profit model, present profit model of
Mobile Internet seems very weak and lack of
innovation. In the future, correlation analysis and
index calculation on district level could be carried
out.
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ACKNOWLEDGEMENTS
This paper was supported by Major Program of the
National Social Science Foundation of China under
Grant No.15ZDB154.
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