From Experimentation to Citywide Rollout: Real Options for a Municipal WiMax Network in the Netherlands

Bert Sadowski, Mathijs Verheijen and Alberto Nucciarelli
Additional contact information
Mathijs Verheijen: University of Technology Eindhoven, The Netherlands
Alberto Nucciarelli: University of Technology Eindhoven, The Netherlands

Communications & Strategies, 2008, vol. 1, issue 70, 101-126

Abstract: The paper undertakes a techno-economic analysis of a WiMax network in the unlicensed band (5 GHz) based on a network design for a medium sized, sub-urban community. WiMax (Worldwide Interoperability for Microwave Access) networks based on IEEE802.16 group of standards have been heralded as "serious competitor" and even as a disruptive technology in the local loop at a time when commercial field trials and initial deployment of these technologies unfold throughout Europe. As traditional net present value (NPV) calculation taking the current European regulatory and legislative framework into account showed that high technical and market uncertainty would delay the implementation of a municipal WiMax network, a real options analysis has been undertaken to examine these uncertainties. An expanded NPV calculation, which included the option to expand, provided positive results. Due to licensing fees and coverage performance of base stations, differences in profitability emerged between WiMax networks operating in the unlicensed (5 GHz) and licensed band (2.5/3.5 GHz). The entry of commercial wireless providers in 2008 in the licensed WiMax band is expected to have repercussions for the viability of municipal WiMax networks.

Keywords: WiMax; European legislation; municipal networks; real options. (search for similar items in EconPapers)
JEL-codes: D81 L86 (search for similar items in EconPapers)
Date: 2008
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
http://repec.idate.org/RePEc/idt/journl/CS7006/CS70_SADOWSKI_et_al.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:idt:journl:cs7006

Access Statistics for this article

More articles in Communications & Strategies from IDATE, Com&Strat dept. Contact information at EDIRC.
Bibliographic data for series maintained by BLAVIER Thomas ( this e-mail address is bad, please contact ).