Flexible Investment Decisions in the Telecommunications Industry: Case Applications using Real Options

Fotios C. Harmantzis (), Lenos Trigeorgis () and Venkata Praveen Tanguturi ()
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Fotios C. Harmantzis: Stevens Institute of Technology
Lenos Trigeorgis: University of Cyprus and MIT, http://www.pba.ucy.ac.cy/staff/lenos.htm
Venkata Praveen Tanguturi: Stevens Institute of Technology

No 06-06, Working Papers from NET Institute

Abstract: The 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.

Pages: 65 pages
Date: 2006-09, Revised 2006-09
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Citations: View citations in EconPapers (2)

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