A real options approach to decision making in broadband technology selection Online publication date: Mon, 27-Apr-2020
by Marco Araújo; Love Ekenberg; João Confraria; Mats Danielson
International Journal of Multicriteria Decision Making (IJMCDM), Vol. 8, No. 2, 2019
Abstract: The European Union has recently launched an ambitious plan to mitigate drastically, by 2025, the number of households lacking access to a 100 Mbps broadband connection through the subsidisation of the deployment of network infrastructure in rural areas. Decision makers such as governments and regulatory authorities therefore have to choose, among a pool of alternatives, a technology capable of delivering the required throughput on a large scale, based on a trade-off between the infrastructure costs and the subscribers' perceived utility for each alternative. Such a trade-off is not simple, since there is no straightforward manner to rank the subscribers' perceived utility against the network infrastructure cost. In this article, we propose a methodology based on real options, which outputs the value of each technology using multi-attribute value theory as an input, alongside the project's risk and its costs.
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