Strategic investment planning in regional deployment of telecommunication services: a real options approach |
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| Authors: | Kum-Soon Lim Deok-Joo Lee Hyung-Sik Oh |
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| Affiliation: | (1) Consulting Division, Tmaxsoft, 18F, Glasstower Bldg., 946-1, Daechi-dong, Gangnam-gu, Seoul, South Korea;(2) College of Advanced Engineering, Kyung Hee University, 1 Seocheon-dong, Kihung-gu, Yongin-si, Kyunggi-do, 446-701, South Korea;(3) Department of Industrial Engineering, Seoul National University, Seoul, 151-744, South Korea |
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| Abstract: | In this paper we perform an empirical study to create an optimal investment strategy for the regional deployment of IMT-2000,
a next-generation telecommunication service in Korea. We develop a multiple real option model using a binomial lattice, to
evaluate managerial flexibility. Managerial flexibility is evaluated specifically in terms of its decision-making ability,
when considering two deferral options and a sequential compound option for investment. Using the model, we evaluate the IMT-2000
project and find the optimal investment strategy for the three regions of Korea, depending on the annual market situation. |
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| Keywords: | L1 L8 M21 R1 |
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