7 research outputs found
Flexible Investment Decisions in the Telecommunications Industry: Case Applications using Real Options
Get PDFThe telecommunications sector is one of the most innovative,
high-growth, capitalintensive yet volatile sector of the economy. This
research addresses critical concerns of how, when, and why an enterprise
or a service provider should undertake new investments. The study
investigates the power of flexibility in investment decision making
process, by applying the real options methodology. Five case
applications are studied: a) investment decisions in next generation
wireless networks; b) investing in integrated wireless networks; c)
migration to wireless broadband internet services; d) valuing deployment
of Wi-Fi networks in enterprise markets; and e) valuing Hosted VOIP
services for enterprise markets. The case studies are analyzed both
qualitatively and quantitatively
Migration to 3G wireless broadband internet and real options: The case of an operator in India
No full textThe paper focuses on third generation wireless technologies and on alternative technologies for wireless local area networks. The authors present the evolutionary migration path from second to third generation systems. Technological, economic and behavioral factors related to decision-making towards the migration are proposed. As an example, the paper studies the case of the national incumbent operator of India. It analyzes qualitatively the migration problem from the perspective of the operator, the equipment manufacturer and the users. For the quantitative analysis, real options are used to value the investment decisions. The analysis suggests that the initial (sunk) investment cost, the average revenue per user, the growth of the subscriber base and the volatility of the markets are the key factors in the investment process.3G GSM CDMA Wireless Broadband India UMTS India Wi-Fi Real options
Investment decisions in the wireless industry applying real options
No full textThe wireless industry is one of the most capital intensive high-technology industries. This paper applies real options techniques to estimate investments under uncertainty in two new ventures: (a) deferral of the expansion from 2.5G to 3G networks; and (b) expansion of a 2.5G network using Wi-Fi as an alternative technology. The cases are examined and analyzed both qualitatively and quantitatively, using realistic assumptions and parameters. Investment cost, number of subscribers, pricing of services, and risk are at the core of investment decision processing. In both cases, sensitivity analysis of the value of the (real) option considering the above key parameters was conducted, to extrapolate useful findings that should be taken into consideration by the decision makers in wireless companies.Wireless networks 3G GSM UMTS Wi-Fi Real options Investment decisions
Flexible Investment Decisions in the Telecommunications Industry: Case Applications using Real Options
No full textThe telecommunications sector is one of the most innovative, high-growth, capitalintensive yet volatile sector of the economy. This research addresses critical concerns of how, when, and why an enterprise or a service provider should undertake new investments. The study investigates the power of flexibility in investment decision making process, by applying the real options methodology. Five case applications are studied: a) investment decisions in next generation wireless networks; b) investing in integrated wireless networks; c) migration to wireless broadband internet services; d) valuing deployment of Wi-Fi networks in enterprise markets; and e) valuing Hosted VOIP services for enterprise markets. The case studies are analyzed both qualitatively and quantitatively.
