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Optimizing the date of an upgrading investment in a data network

Author

Listed:
  • Frédéric Morlot

    (Orange Labs [Issy les Moulineaux] - France Télécom)

  • Benoît Fourestié

    (France Telecom Division R&D [Issy-les-Moulineaux] - France Télécom)

  • Salah Eddine Elayoubi

    (Orange Labs [Issy les Moulineaux] - France Télécom)

Abstract

Due to the introduction of new services, the volume of data transferred in mobile networks is rapidly growing and operators periodically face the necessity to upgrade their network. Such upgrades allow them to increase the capacity and provide adequate Quality of Service (QoS). In this paper we propose a general framework for deriving the optimal date for a network upgrade. We show that this date is the result of a compromise between the decrease of upgrade investment cost with time and the loss of profit generated by insufficient capacity. The upgrade should hence be performed when the loss of profit, derived using analytical capacity expressions, exceeds the expected discount. The model presented herein accounts for the randomness of the demand and upgrading cost functions, and results are given for a HSDPA network.

Suggested Citation

  • Frédéric Morlot & Benoît Fourestié & Salah Eddine Elayoubi, 2007. "Optimizing the date of an upgrading investment in a data network," Post-Print hal-00627087, HAL.
    • Handle: RePEc:hal:journl:hal-00627087
    Note: View the original document on HAL open archive server: https://hal.science/hal-00627087
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    Cited by:

    1. Frédéric Morlot & Thomas Redon & Salah Eddine Elayoubi, 2011. "Risk-hedging using options for an upgrading investment in a data network," Working Papers hal-00627092, HAL.

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