Techno-economic valuation of mobile communications scenarios

Jarmo Harno

    Research output: ThesisDoctoral ThesisCollection of Articles


    Valuation of large projects on new communications technologies is a challenging task. Major investments are required to spread out technology and services, the characteristics of which are still largely unknown. A balanced view is needed on capabilities of the technologies, market demand, and relevant value network actors and their economies. In this dissertation, comprehensive techno-economic modelling of these aspects will be introduced for valuation of selected business scenarios. The research framework is mobile data services and business architectures in the advent of new technologies, like UMTS (Universal Mobile Telecommunications System), WLAN (Wireless Local Area Network) and WiMAX (Worldwide Interoperability for Microwave Access). The techno-economic method in this context comprises the modelling of a large set of technology, market and other factors in relation to the business operations of the analysed market actors. The many uncertainties concerning future service innovations and market development set demands on scenario creation and parameter estimation. Traditional techno-economic investment project calculation is not enough. This study gives devices for strategic decision making by analysing three different technology transitions: The modelling of Western-European incumbent operator business starting from the early 2000's indicated that the UMTS deployment should be started without delay to maximise the long-term profits from the acquired licenses, contrary to looking for short-term investment payoffs that was prevalent after the telecommunications downturn. Results also show that the emerging WLAN technology would not become a substitute for UMTS, but the public WLAN will complement the UMTS based business architecture. Modelling of the upcoming mobile WiMAX in comparison to UMTS path indicated that the mobile WiMAX cannot challenge the UMTS, as the latter one offers a better business case for the key actors. In the last transition, techno-economic delta analysis was used to quantify the benefits from the fixed-mobile convergence. The main enhancements to the techno-economic method are first the extensive classification of advanced mobile services and related modelling of service diffusion, usage patterns, capacity requirements and revenues. The second contribution is to improve the analysis of service usage in relation to technology characteristics by integrating an end-user model that gives the demand and revenue potential of each service type, per user segment and utilised technology. A novelty is also the separation of network provisioning and service provisioning part of the business architecture into separate but interlinked models. The fourth contribution to the method is the application of real options method on large communications technology deployment projects, solving option modelling problems due to the complex dependencies of the project value on the investment timing. The introduced method starts from ordinary expected cash flow valuation, but adds to that the option value related to specific flexibility in the project.
    Translated title of the contributionTechno-economic valuation of mobile communications scenarios
    Original languageEnglish
    QualificationDoctor's degree
    Awarding Institution
    • Aalto University
    • Hämmäinen, Heikki, Supervising Professor
    Print ISBNs978-952-60-3331-0
    Electronic ISBNs978-952-60-3332-7
    Publication statusPublished - 2010
    MoE publication typeG5 Doctoral dissertation (article)


    • mobile services
    • business scenarios
    • value network
    • techno-economics
    • technology strategy
    • real option
    • telecommunications operator
    • 3G
    • UMTS
    • public WLAN
    • WiMAX
    • IMS


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