Individual Tariffs for Mobile Services: Analysis of Operator Business and Risk Consequences

Hong Chen and Louis Pau

ERIM Report Series Research in Management from Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam

Abstract: A design approach is offered for individual tariffs for mass customized mobile service products, whereby operators can determine their contract acceptance rules to guarantee with a set probability their minimum profit and risk levels. It uses realistic improvements to earlier reported negotiation algorithms [1], and a full operator operational model including infrastructure and content acquisition. Value at risk and profit are analyzed when a random user has consistent characteristics to a survey group, so that risk and profits are pooled. This analysis is necessary to give the supplier business guarantees to enter individual tariff agreements. A full numerical case is given for a class of mobile service.

Keywords: Individual tariffs; mobile communication services; risks (search for similar items in EconPapers)
JEL-codes: L63 L96 M (search for similar items in EconPapers)
Date: 2007-08-28
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