AnyLogic Simulates Consumer Choice in Telecommunication Market

Context




Telecommunications providers are seeking to capitalise on the growth potential of broadband internet services in Australia.

The choice of technology roll-out by providers must balance technology roll-out cost, technology limitations of broadband speed decreasing with distance from the source, and consumer’s demand for internet services requiring increasing broadband speeds over time.

Modeling Approach




Evans & Peck and Alcatel Australia jointly developed an agent based consumer choice model which allows scenario analysis on the potential impact to providers over the next 10 years. Critical to the consumer choice behaviour in the model were the geographical aspects of the consumer's location in relation to technology sources (eg. telephone exchange or base station) which ultimately setup a choice matrix of technologies and providers for that particular consumer.

A user interface was created in which a map of the geographical area of a single telephone exchange could be overlaid with both the location characteristics of households (density and consumer type) and of technologies' coverage.

Key features of the modelling tool developed include:

  •     Segmentation of the market by multiple customer types
  •     Multiple internet service providers, each offering multiple technologies
  •     Inclusion of cost models (CAPEX/OPEX) and revenue models (ARPU)
  •     Geographical mapping of populations densities and technology coverage areas
  •     Consumer choice algorithm based on availiabilty of technologies, customer profile and ranking of providers
  •     Variation of consumer demand for broadband speed over time based on selection of products (eg. high definition video)  

internet_services_consumer_choice.gif internet_services_consumer_choice_agents.gif

Model developed and published by Evans & Peck Australia.

More Case Studies

  • Simulation of Telecom Market in Argentina
    In 2008 there were three huge companies in the telecommunications market in Argentina. Each company wanted to enter the markets that they hadn’t covered yet, but the consequences of such actions had to be estimated. That’s why Telefónica decided to employ Continente Siete, a consulting company, to build a model of the market using AnyLogic multimethod simulation software.
  • Major US Airline Decides NOT to Charge Additional Fees
    A major US airline wanted to explore several options to generate new profits through ancillary products or changes to existing policies. Although the revenue generation through charging additional fees was apparent in the short term, prior to implementing a policy change, the airline opted to evaluate the long term perceived impact on brand equity, market share and customer loyalty.
  • American Motor Vehicle Market Simulation
    One of the world’s leading motor vehicle producers needed a strategic forecast of their performance in the US market for the next five years. The company wanted to estimate the dynamics of demand on their product and the expected revenue, taking into account current clients, dealers, competitors, and the used vehicle market. Their main objective was to determine how much product the company would need to produce in the following years.
  • Modeling of a Pharmaceutical Product Launch
    One of the huge pharmaceutical companies employed Bayser Consulting for development of product launch strategy. Simulation modeling was applied for reconstruction of interactions between the company, doctors and patients.
  • A Pharmaceutical Company Decides on a Marketing Strategy Using Agent-Based Modeling
    Sterling Simulation consulting company was chosen to provide an agent-based marketing model for a pharmaceutical firm. The company owned two competing non-generic drugs on the same market. One drug was well established and tended to be the industry leader, and the other one was recently introduced. There were several concerns about how to obtain a useful market share for the newer drug, while maintaining or increasing the market share for the company’s drugs as a whole.