The Economics of “Wireless Net Neutrality”

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Valuation of 3G spectrum license in India: A real option approach

India is about to enter a new technological phase as far as mobile technology is concerned. After almost a decade of existence, Third Generation (3G) mobile technology will be rolled out in India. The licenses for the same were auctioned in April – May 2010 and 3G licenses were allocated to the winners in September 2010. Nine private telecom operators entered the bidding for the license and eventually seven won the licenses. The bidding was intense and eventually the aggregate fees of the license as received by the government were almost twice the expected amount. In the backdrop of experience of 3G auction winners in UK and Germany who paid huge sums to acquire the 3G licenses and later lost their market capitalization as the markets perceived that the price paid for the license was more than the actual value of the license, analysts in India were concerned if the operators had paid too much for the licenses. In this report aggregate value of the 3G licenses is calculated using both traditional discounted cash flow approach and real options approach. We find that the rollout of 3G services gives an internal rate of return of 14.2%over the life of the license. If we assume an internal rate of return of 15% for the telecom operators then the aggregate license value comes out to be INR 594 Billion which is 12% lower than what the operators have paid to acquire the license. We also found out that the value of the license as calculated from the real options methodology is INR 798 Billion which is 17.8% higher than the aggregate value paid by the operators. Hence we see that DCF valuation suggests that the licenses were overvalued while Real Options methodology suggests that the licenses were undervalued. The report discusses the reasons for differences between real option valuation and DCF valuation of the license, the possible challenges that the 3Goperators might face in the short to long term and what are the key enablers for the growth of3G services if they want to extract the maximum mileage out of the 3G technology. The report recommends that in future while allocating telecom licenses or licenses in sectors where high and irreversible investment is required and there is a scope for the licensees to invest in phases or in modules, the government should consider real options methodology for setting the price of the license., or the base price of the licenses in case the government decides to follow an auction methodology3G spectrum, mobile technology, valuation, real options, DCF

International benchmarking of Australian telecommunications services

The study compares the performance of the Australian telecommunications services industry with those in other countries. Related papers submitted to this study by NECG Ltd. and Telecom New Zealand have been released with the report.international benchmarking - telecommunications - Telstra - carriers - service providers - social policy - retail price regulation - Universal Service Obligation - competition - regulation - access - number portability - accounting separation - anti-competitive behaviour - Public Switched Telephone Network - ISDN - mobile - residential price - business price - phone - SMEs - quality of service - performance indicators - productivity

Revenue recognition, January 1, 2019; Audit and Accounting Guide

https://egrove.olemiss.edu/aicpa_indev/2422/thumbnail.jp

The mobile Internet report

Key ponts Material wealth creation / destruction should surpass earlier computing cycles. The mobile Internet cycle, the 5th cycle in 50 years, is just starting. Winners in each cycle often create more market capitalization than in the last. New winners emerge, some incumbents survive – or thrive – while many past winners falter. The mobile Internet is ramping faster than desktop Internet did, and we believe more users may connect to the Internet via mobile devices than desktop PCs within 5 years. Five IP-based products / services are growing / converging and providing the underpinnings for dramatic growth in mobile Internet usage – 3G adoption + social networking + video + VoIP + impressive mobile devices. Apple + Facebook platforms serving to raise the bar for how users connect / communicate – their respective ramps in user and developer engagement may be unprecedented. Decade-plus Internet usage / monetization ramps for mobile Internet in Japan plus desktop Internet in developed markets provide roadmaps for global ramp and monetization. Massive mobile data growth is driving transitions for carriers and equipment providers. Emerging markets have material potential for mobile Internet user growth. Low penetration of fixed-line telephone and already vibrant mobile value-added services mean that for many EM users and SMEs, the Internet will be mobile

Valuation of 3G spectrum license in India: A real option approach

India is about to enter a new technological phase as far as mobile technology is concerned. After almost a decade of existence, Third Generation (3G) mobile technology will be rolled out in India. The licenses for the same were auctioned in April – May 2010 and 3G licenses were allocated to the winners in September 2010. Nine private telecom operators entered the bidding for the license and eventually seven won the licenses. The bidding was intense and eventually the aggregate fees of the license as received by the government were almost twice the expected amount. In the backdrop of experience of 3G auction winners in UK and Germany who paid huge sums to acquire the 3G licenses and later lost their market capitalization as the markets perceived that the price paid for the license was more than the actual value of the license, analysts in India were concerned if the operators had paid too much for the licenses. In this report aggregate value of the 3G licenses is calculated using both traditional discounted cash flow approach and real options approach. We find that the rollout of 3G services gives an internal rate of return of 14.2%over the life of the license. If we assume an internal rate of return of 15% for the telecom operators then the aggregate license value comes out to be INR 594 Billion which is 12% lower than what the operators have paid to acquire the license. We also found out that the value of the license as calculated from the real options methodology is INR 798 Billion which is 17.8% higher than the aggregate value paid by the operators. Hence we see that DCF valuation suggests that the licenses were overvalued while Real Options methodology suggests that the licenses were undervalued. The report discusses the reasons for differences between real option valuation and DCF valuation of the license, the possible challenges that the 3Goperators might face in the short to long term and what are the key enablers for the growth of3G services if they want to extract the maximum mileage out of the 3G technology. The report recommends that in future while allocating telecom licenses or licenses in sectors where high and irreversible investment is required and there is a scope for the licensees to invest in phases or in modules, the government should consider real options methodology for setting the price of the license., or the base price of the licenses in case the government decides to follow an auction methodolog

Distributed Cognitive RAT Selection in 5G Heterogeneous Networks: A Machine Learning Approach

The leading role of the HetNet (Heterogeneous Networks) strategy as the key Radio Access Network (RAN) architecture for future 5G networks poses serious challenges to the current cell selection mechanisms used in cellular networks. The max-SINR algorithm, although effective historically for performing the most essential networking function of wireless networks, is inefficient at best and obsolete at worst in 5G HetNets. The foreseen embarrassment of riches and diversified propagation characteristics of network attachment points spanning multiple Radio Access Technologies (RAT) requires novel and creative context-aware system designs. The association and routing decisions, in the context of single-RAT or multi-RAT connections, need to be optimized to efficiently exploit the benefits of the architecture. However, the high computational complexity required for multi-parametric optimization of utility functions, the difficulty of modeling and solving Markov Decision Processes, the lack of guarantees of stability of Game Theory algorithms, and the rigidness of simpler methods like Cell Range Expansion and operator policies managed by the Access Network Discovery and Selection Function (ANDSF), makes neither of these state-of-the-art approaches a favorite. This Thesis proposes a framework that relies on Machine Learning techniques at the terminal device-level for Cognitive RAT Selection. The use of cognition allows the terminal device to learn both a multi-parametric state model and effective decision policies, based on the experience of the device itself. This implies that a terminal, after observing its environment during a learning period, may formulate a system characterization and optimize its own association decisions without any external intervention. In our proposal, this is achieved through clustering of appropriately defined feature vectors for building a system state model, supervised classification to obtain the current system state, and reinforcement learning for learning good policies. This Thesis describes the above framework in detail and recommends adaptations based on the experimentation with the X-means, k-Nearest Neighbors, and Q-learning algorithms, the building blocks of the solution. The network performance of the proposed framework is evaluated in a multi-agent environment implemented in MATLAB where it is compared with alternative RAT selection mechanisms

Capturing Risk in Capital Budgeting

NPS NRP Technical ReportThis proposed research has the goal of proposing novel, reusable, extensible, adaptable, and comprehensive advanced analytical process and Integrated Risk Management to help the (DOD) with risk-based capital budgeting, Monte Carlo risk-simulation, predictive analytics, and stochastic optimization of acquisitions and programs portfolios with multiple competing stakeholders while subject to budgetary, risk, schedule, and strategic constraints. The research covers topics of traditional capital budgeting methodologies used in industry, including the market, cost, and income approaches, and explains how some of these traditional methods can be applied in the DOD by using DOD-centric non-economic, logistic, readiness, capabilities, and requirements variables. Stochastic portfolio optimization with dynamic simulations and investment efficient frontiers will be run for the purposes of selecting the best combination of programs and capabilities is also addressed, as are other alternative methods such as average ranking, risk metrics, lexicographic methods, PROMETHEE, ELECTRE, and others. The results include actionable intelligence developed from an analytically robust case study that senior leadership at the DOD may utilize to make optimal decisions. The main deliverables will be a detailed written research report and presentation brief on the approach of capturing risk and uncertainty in capital budgeting analysis. The report will detail the proposed methodology and applications, as well as a summary case study and examples of how the methodology can be applied.N8 - Integration of Capabilities & ResourcesThis research is supported by funding from the Naval Postgraduate School, Naval Research Program (PE 0605853N/2098). https://nps.edu/nrpChief of Naval Operations (CNO)Approved for public release. Distribution is unlimited.

Timor Telecom case study: ten years of experience

A Work Project, presented as part of the requirements for the Award of a Masters Degree in Finance from the NOVA – School of Business and Economic

Is Federal Preemption Efficient In Cellular Phone Regulation?

Increased regulation of wireless telephone service is being proposed by both federal and state policy makers, raising the question of optimal jurisdiction. The case for decentralization (state rules) is strongest when the economic activity being regulated is localized and market spillovers relatively small. Alternatively, the case for uniformity (federal rules) becomes more persuasive when externalities dictate that efficiency in one state is closely tied to efficient arrangements in others. In this situation, balkanization becomes disruptive and federalism becomes ineffective as firms conform not to diverse standards but (in the best case scenario) to the most stringent ones. As an empirical matter, wireless telephony exhibits strong economies of scale and scope, and national networks have proven crucial to industry development. Consolidation of fragmented license areas has, along with new entry, been instrumental in reducing rates by 79%, 1993-2002. Initiating patchwork state rules could threaten such progress as rules implemented by state commissions are not likely to account for the broad effect of their rules. This conclusion is buttressed by a natural experiment involving the federal government's 1993 preemption of state regulation of cellular telephone rates. Contrary to arguments made by leading utility commissions (including those of New York and California), rates did not rise with the elimination of state rate controls.Technology and Industry