Investment flexibility and competition modeling for broadband business

• We analyze broadband business for municipalities and utility companies.
• We model competition for such business, which can be divided in stages.
• We adopt price competition modeling and compound real option analysis.
• A real business case is analyzed by using the proposed framework.
• The analysis shows that delay of investment may be more attractive under business uncertainty.

In the new era of the telecommunications business field, a large number of potential investors are capable of entering into the market of the broadband services provision. This paper provides a model for analyzing the new perspectives for new investors in this field. It integrates compound Real Options and Game Theory techniques and adopts price competition analysis, for the broadband services provision, in order to find the optimal business strategy. Finally, it applies the analysis to a real life business case by formulating and solving it.