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

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 greater contribution in the MVNO’s investment decision making process. Keywords— a pricing model, Mobile Network Operator, Mobile Virtual Network Operator, second-generation cellular network, 3G UMTS network, sensitivity analysis