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Information theoretics-based technoeconomic forecasting: application to telecommunication service industry

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  • Perambur Neelakanta
  • Raef Yassin

Abstract

Addressed in this paper is an information-theoretics inspired econometric approach to evolve a forecast model on the growth profiles of telecommunication services. It includes cohesively, both the profile of user-economics as well as the technological framework of service providers; and the forecasting suite is built on the basis of information-theoretics considerations. It refers to a modified Fisher-Kaysen method that accounts for “free-market” principles and uses entropy (stochastic) details of differential changes in the short-run (state) variables of the growth function. Further, the principle of proportional fairness is appropriately invoked and the heuristics of users’ willingness-to-pay for the network resources allocated to them is presumed. A few simulation examples using real-world data are furnished to validate the forecast algorithm developed. The computed results on forecasting presented depict a “cone-of-forecast” in the ex ante regime of the examples considered. Relevance of this method to modern aspects of managerial approach and market penetration vis-à-vis forecast trends is indicated. Shortcomings of the method are identified. Copyright Springer Science+Business Media New York 2012

Suggested Citation

  • Perambur Neelakanta & Raef Yassin, 2012. "Information theoretics-based technoeconomic forecasting: application to telecommunication service industry," Netnomics, Springer, vol. 13(1), pages 45-78, April.
    • Handle: RePEc:kap:netnom:v:13:y:2012:i:1:p:45-78
    DOI: 10.1007/s11066-012-9071-3
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    References listed on IDEAS

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    1. Grubesic, Tony H. & Murray, Alan T., 2005. "Geographies of imperfection in telecommunication analysis," Telecommunications Policy, Elsevier, vol. 29(1), pages 69-94, February.
    2. Robert C. Merton, 1975. "An Asymptotic Theory of Growth Under Uncertainty," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 42(3), pages 375-393.
    3. Schoder, Detlef, 2000. "Forecasting the success of telecommunication services in the presence of network effects," Information Economics and Policy, Elsevier, vol. 12(2), pages 181-200, June.
    4. Perambur S. Neelakanta & Daniel M. Baeza, 2002. "Arbitrated Sharing of Traffic in Telecommunication Networks: Technoeconomical Considerations," Netnomics, Springer, vol. 4(2), pages 105-129, November.
    5. Perambur Neelakanta & Angela Perez & Daniel Baeza, 2008. "An ex ante forecast on economically engineered bit rates for IPTV service via xDSL transports of internodal access," Netnomics, Springer, vol. 9(1), pages 21-46, January.
    6. Perambur Neelakanta & Renata Sardenberg, 2011. "Consumer benefit versus price elasticity of demand: a nonlinear complex system model of pricing internet services on QoS-centric architecture," Netnomics, Springer, vol. 12(1), pages 31-60, April.
    7. Madden, Gary & Tan, Joachim, 2007. "Forecasting telecommunications data with linear models," Telecommunications Policy, Elsevier, vol. 31(1), pages 31-44, February.
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