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

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  • Savunen, Tapio
  • Töyli, Juuso
  • Mähönen, Petri

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.

Suggested Citation

  • Savunen, Tapio & Töyli, Juuso & Mähönen, Petri, 2025. "Beyond traditional planning: Using real options to navigate uncertainties in next-generation public safety projects," 33rd European Regional ITS Conference, Edinburgh, 2025: Digital innovation and transformation in uncertain times 331305, International Telecommunications Society (ITS).
    • Handle: RePEc:zbw:itse25:331305
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    File URL: https://www.econstor.eu/bitstream/10419/331305/1/ITS-E-2025-60.pdf
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    References listed on IDEAS

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    1. Hallahan, Ryan & Peha, Jon M., 2011. "The business case of a network that serves both public safety and commercial subscribers," Telecommunications Policy, Elsevier, vol. 35(3), pages 250-268, April.
    2. Apiruk Detwarasiti & Ross D. Shachter, 2005. "Influence Diagrams for Team Decision Analysis," Decision Analysis, INFORMS, vol. 2(4), pages 207-228, December.
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