The investment behavior of telecommunication operators: An agent-based modeling approach

Abstract

In this study, Turkish mobile operator’s investment strategies to new and old mobile communication technologies is modelled with the agent based modelling and simulation approach. There are three operators in Turkish telecommunication market: Turkcell, Turk Telekom and Vodafone. The model is designed to explore the relationship between investment of mobile operators to mobile communication technologies and profit obtained from these technologies. In this model, the basic principle is technology adoption. There are many factors effecting technology adoption behavior of mobile communication subscriber. Our model is aimed at investigating determinants of investment strategies of operators. These strategies are sensitive to the adaptive behavior of subscriber to new generations of mobile communication technologies. The simulation results indicate that: For each operator the revenues from the old technology declines when the new technology is in operation. The expected revenue from the new technologies is lower than the old technology revenues. As the percentage of the investments made to new technology increases present value of the operators’ increases. Based on this finding, it can be suggested that all operators should increase their investments to the new technology.