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Estimating the Economic Value of Flexibility in Access Network Unbundling
Abstract : By means of local loop unbundling (LLU), the incumbent operator opens the access network connecting the customer to the central office to other operators. Other licensed operators (OLO) will use this possibility to provide customers their services. The price of the LLU-offer is set by a regulator, aiming to allow fair competition in a monopolistic market. This is typically fixed at the lowest possible price covering all of the incumbent's costs in this network. Now, the OLO always has the choice between the regulated LLU-offer, own installation or not providing access to the customer. In order to remove any unfair competition advantages, the regulator should incorporate a flexibility bonus in its LLU-pricing strategy. In this paper we show how the economic technique of real option valuation can be used for estimating a numeric value for this flexibility advantage.
Cited literature [9 references]
https://hal.inria.fr/hal-01059114
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Submitted on : Friday, August 29, 2014 - 1:34:26 PM
Last modification on : Wednesday, November 3, 2021 - 2:56:50 PM
Long-term archiving on: : Sunday, November 30, 2014 - 10:40:12 AM
Contributor : Hal Ifip Connect in order to contact the contributor
Submitted on : Friday, August 29, 2014 - 1:34:26 PM
Last modification on : Wednesday, November 3, 2021 - 2:56:50 PM
Long-term archiving on: : Sunday, November 30, 2014 - 10:40:12 AM
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