Assessing Revenue Growth in Wireless Telecom under Production Uncertainty: An Approach of Modeling and Simulation

Abstract

The local business environment of telecom industry in Manipur supports network reliability of wireless telecom at the expense of high input costs. The network reliability is a quality of service highly demanded by telecom users and it is regarded as business success parameter of the telecom firm. The production theory predicts that cost-benefit analysis becomes difficult in an environment where prices of input resources are rising at high and the firm is led to postpone the production or reduce the production investment. Production of reliable service at the expense of heavy cash outlays has resulted production uncertainty on the concept of negative return on investment.  This paper is inspired by the mismatch between demand and supply of network reliability in the context of local business environment. This paper examines the behavior of wireless telecom network and employs a production function of a model network to study the economic growth behavior of the network under varying sets of input resources. In this paper, I make a simulation approach to generate empirical data for the traffic and other decision variables of the production function. The simulation model is trained to investigate network traffic as function of input resources such as diesel fuel, grid energy and network uptime and the information obtained from simulation is used in cost-benefit analysis of the production system.  I find that there is meaningful revenue growth in the existing environment at 100 percent network uptime, which is desired for the highest level of network reliability.

Keywords: Economic growth; Production uncertainty; Local business environment; Network reliability