A Pricing Model and Sensitivity Analysis for MNO's Investment Decision Making in 3G UMTS Networks

In this paper we propose a pricing model for MNO and MVNO's investment in 3G UMTS networks. We also investigate and conceptualize the relationship among MNO, MVNO, and other related variables in the proposed pricing model based on the growth and expansion of 3G UMTS networks market in Thailand. Next, we develop the influence diagrams representing MNO and MVNO and use them to explore the relationship of total costs, total revenues, and net profit. This diagram is used to find optimal decisions which maximize the expected profit values for both MNO and MVNO. Finally, we suggest a simple way of sensitivity analysis to identify the parameter values such as the total number of 3G customers and the number of MVNOs against the MNO's profit in the 3G wireless network market. An illustrative example of one-way sensitivity analysis is presented. The analysis of the results obtained from the example attempts to provide recommendations which may be utilised and made a greater contribution in the MNO's investment decision making process.