Economics of IMT-2000 3G mobile systems

The authors present the techno-economic evaluation of multimedia mobile (IMT 2000) roll-out in two sample European countries with contrasting profiles: a large country with moderate mobile penetration and a ldquofast-trackrdquo smaller country with much higher mobile penetration. Results show a higher net present value in the larger country, but the internal rate of return (IRR) and payback period (8 years) are similar for both profiles. Sensitivity analysis shows that, with 25% market share, the operator roughly breaks even. When market share increases to 35%, the IRR practically doubles. These cases show that the number of competitors has a significant impact, and that solutions such as roaming agreements may be sought to reduce initial investments