Beyond traditional planning: Using real options to navigate uncertainties in next-generation public safety projects

Tapio Savunen, Juuso Töyli and Petri Mähönen

33rd European Regional ITS Conference, Edinburgh, 2025: Digital innovation and transformation in uncertain times from International Telecommunications Society (ITS)

Abstract: This study examines the business aspects of mobile network operators (MNOs) in public safety mobile broadband projects using MNOs' 4G/5G networks. It compares incremental and waterfall project management approaches to assess their impact on MNO profitability, public funding requirements, and the management of investment uncertainty through real options. A discounted cash flow model was used to evaluate both approaches from the perspectives of MNOs and government authorities (GAs). The findings show that the incremental project management approach outperforms the waterfall approach for both MNOs and GAs, improving MNO profitability and reducing public funding needs through phased service introduction and user adoption. The choice between project management approaches depends on project goals – whether to prioritise rapid technology replacement or added value for public safety users. This study supports MNOs in optimising financial outcomes in public safety projects, provides strategic guidance for GAs in designing effective public safety procurement processes, and offers policy recommendations for regulation.

Keywords: mobile network operator; public safety; public funding; incremental project management; real options (search for similar items in EconPapers)
Date: 2025
New Economics Papers: this item is included in nep-cfn, nep-ict and nep-ppm
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:itse25:331305

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