Journal of Korean Society for Quality Management (품질경영학회지)

Korean Society for Quality Management (한국품질경영학회)
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Optimal 3G Telecommunication Service Switching Time Considering Telecommunication Quality of Service

통신서비스 품질을 고려한 신규 통신서비스 가입 시기에 대한 연구

  • Lee, Jong-Ryong (College of Business Administration, Seoul National University) ;
  • Choi, kang-Hwa (Division of Management, Hansung University) ;
  • Kim, Soo-Wook (College of Business Administration, Seoul National University)
  • Published : 2008.09.30
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Abstract

This paper examines when a consumer in existent telecommunication 2G applies to new telecommunication service 3G from the viewpoint of an option pricing theory. To improve telecommunication quality of service, the consumer applies to 3G. The application means an exchange of 2G for 3G with extra costs such as searching and conversion costs. Since the option to exchange is a right that the consumer can exercise or not, application to 3G is deemed an exercise of the option to exchange at most suitable value of the option. The timing to exercise the option depends on the extra costs and the additional communication benefit from new telecommunication quality of service. These affect an optimal timing to apply to 3G. The optimal applying or switching timing to 3G is when an economic value of the option to exchange is equal to an economic value of the extra costs plus the additional telecommunication quality from new telecommunication service. The option analysis used in this paper is applicable to various industries.

Keywords

References

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