A Pricing Model and Sensitivity Analysis for MVNO Investment Decision Making in 3G UMTS Networks

Abstract—In this article 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. 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.
Finally, we suggest a simple way of sensitivity analysis to identify
the most critical parameters affecting the performance of the
MVNO in the 3G wireless network market. An illustrative
example of one-way sensitivity analysis is presented. The analysis
of the results obtained from the model focuses on of MVNO’s
customers and its profits in an attempt to provide
recommendations which may be utilised and made
a greatercontribution in the MVNO’s investment decision making process.