Contents
1 - Introduction...................................................................................................................................3
2 - Regulation and Investment............................................................................................................4
2.1 - The next generation networks................................................................................................. 4
2.2 - Literature review..................................................................................................................... 8
3 - A real option theory approach to the telecommunication industry ............................................. 10
3.1 - A discrete binomial model: an illustrative example ............................................................. 10
3.2 - Impact of regulation on investment: the issue of truncation................................................. 19
4. - A model to evaluate investment in NGNs.............................................................................. 22
4.1 - Model input parameters ........................................................................................................ 23
4.1.1 - General inputs.................................................................................................................... 25
4.1.1.1 - Citéfibre specific inputs.................................................................................................. 25
4.1.1.2 - Established telecommunication operator inputs ............................................................. 27
4.2 - Model outcome and the role of regulation............................................................................ 29
5 - Concluding remarks .................................................................................................................... 39
References......................................................................................................................................... 41