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

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Author Info
Fotios C. Harmantzis () (Stevens Institute of Technology)
Lenos Trigeorgis () (University of Cyprus and MIT)
Venkata Praveen Tanguturi () (Stevens Institute of Technology)
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.

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File URL: http://www.netinst.org/Harmantzis-Trigeorgis.pdf
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Publisher Info
Paper provided by NET Institute in its series Working Papers with number 06-06.

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Length: 65 pages
Date of creation: Sep 2006
Date of revision: Sep 2006
Handle: RePEc:net:wpaper:0606

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