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Simobiz Business Game - Mobile Telecom Markets Presentation

Simobiz Business Game - Mobile Telecom Markets Presentation. 09/2003 Michel Berne Institut national des Télécommunications, Evry, France michel.berne@int-evry.fr. Outline. The Simobiz Project Simobiz Model Hypothesis Computation modules : market, networks, HR, finance Print-outs

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Simobiz Business Game - Mobile Telecom Markets Presentation

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  1. SimobizBusiness Game - Mobile Telecom MarketsPresentation 09/2003 Michel Berne Institut national des Télécommunications, Evry, France michel.berne@int-evry.fr

  2. Outline • The Simobiz Project • Simobiz Model • Hypothesis • Computation modules : market, networks, HR, finance • Print-outs • Simulations • Conclusions & perspectives

  3. Presentation • Simobiz is a business simulation game on mobile networks and markets • Developed by a team at INT : Jean-Michel Sahut (project manager), Michel Berne (technical coordinator), Rasto Kulich (PhD student) - SGES Dpt • Intitially funded through a GET project with ENSTBr and the University of Zilina (Slovakia) • First product « Stratmob» designed for France Telecom R&D • Simobiz developed 2002/2003 (under code name Mobilix)

  4. Timeline • Summer 2000 : project definition • Fall 2000-Fall 2001 : 1st model built • Winter 2001-2002 : Main model built • Spring 2002 : tests • End 2002 : commercial launch • At 30/6/03 : 5 main sessions, 81 participants • Perspectives 2003/2004 : 8 sessions planned for 3 institutions and more than 120 participants • Under consideration to be included in the program of the ITU Centers of Excellence

  5. Development Guidelines • Flexibility, technology-neutral • Learning-oriented • Trade-off « playability »/ realism • Modular & easy to maintain

  6. Features (1) • 3 operators; each operator can offer 4 service plans x 4 mobile terminals • 2 network types (GSM & UMTS) • 2 market segments (each with 2 sub-segments) • 2 geographic zones (eg : cities, countryside) • 8 simulation periods (1 period = 1 year)

  7. Features (2) • Simobiz is fully flexible : • economic environment, demographics, geography • technology • regulation • labor market, financial markets • Simobiz can be used at various levels : • Network, HR, Finance blocks can be « switched » off • Simulations • Simobiz support tools are availaible : return on investment, EBITDA

  8. Features (3) : Scenario • Simobiz is played according to pre-defined scenarios : • description of the country « hosting » the simulation • new technologies introduction timeline • including supplementary exercises : UMTS auctions; negotiations with bankers and regulator; MVNO etc. • Depending on the goals set (pedagogic goals; simulation)

  9. Finally... • Simobiz contains several dozens structural equations; several hundreds « accounting » equations; several hundreds parameters • Using a Systems Analysys approach • Supported by quantitative research • Implemented as a Microsoft Excel workfile for easy maintenance and portability • to be used in class / short courses ; distant support available

  10. Model Architecture Marketing HR Network Finance

  11. Block 1 : Game Core • Diffusion function (« contagion ») • Operator service plans • Customer satisfaction function • Market Share function (Logit-like)

  12. Block 1 : Game Core

  13. Diffusion • Equiped individuals will « contaminate » non-equiped through contact; « contamined » individuals may buy. • This effect is reinforced by advertising and distribution expenses • Telecom budget of individuals : depends on their income, service quality, number of users (club effect)

  14. Operators : Service Plans (1) • 16 « packs » : (4 plans) x (4 terminals) • Catalogue including 10 mobiles, updated yearly • Catalogue including 10 value-added services packs, updated yeary • Service Plans : • GSM (basic), GPRS, EDGE, UMTS (basic); further versions possible • (annual subscription) + price/minute (GSM) or price/MByte (UMTS) • Each terminal, each plan has a « quality index » used by customers

  15. Operators : Service Plans (2) • For one or two geographic zones (part coverage possible) • Do not require building its own network (MVNO possible)

  16. Satisfaction function • Each consumer has a limited budget • She/He computes her/his satisfaction provided by each « pack » (terminal/plan) of each operator (including a fixed line) : • Satisfaction depends on prices and quality of terminals and plans • and on advertising and distribution efforts of operators

  17. Market share function • Luce model (Multinomial Logit variant) • A consumer has a high probability of choosing the pack giving him/her the highest satisfaction • And a decreasing probability of choosing less and less satisfying packs • This function is realistic, controllable, stable; includes a feature to control churn

  18. Block 2 : Networks • 1 GSM (+ GPRS, EDGE) network, 1 UMTS network per operator and per zone • Simplified network planning (for GSM : TRX, BTS, BSC, MSC, GGSN/SGSN) on the basis of traffic forecasts (outgoing and incoming) made by operators; all other network elements are rented to the fixed line operator • Each zone is made of downtown, suburban and rural areas in variable proportion.

  19. Block 2 : Networks • Network deployment can be limited by available frequency bands • Network « quality index » are computed : maintenance, coverage, • Distinction offered/carried/sold traffic; MVNO possible

  20. Block 2 : Networks

  21. Block 3 : Human Resources • 6 categories (maximum) for staff : • Employees/supervisors/managers+Technical/Marketing • Detailed personnel management (hires, resignations, promotions, transfers) • « Optimal staffing » computed by the model for each category • « Labor quality » index including : staffing, training, experience...

  22. Block 3 : Human Resources

  23. Block 4 : Finance • Detailed income statement • Balance sheet • Statement of sources and uses of funds • Cash management • Debt management (long term and short term) • Fiscal policies • Dividend policy

  24. Block 4 : Finance

  25. Other results • Commercial : ARPU, Churn, Terminals sales (global, per zone and market segment), brand value etc. • Network : default rate, congestion (hourly, with transfer of blocked calls to free periods) • Human Resources : turnover, seniority… • Share price

  26. Example : network congestion M Erlangs hours

  27. Business Simulations • Simobiz can also be used for simulation purposes : • Pricing schemes (handset subsidies, prepaid…) • Human resources management • Business plans • Transitions : • RPP-CPP • GSM-GPRS • GSM-UMTS

  28. Example : Price simulation • with 2 prepaid operators and prices varying 0,005 to 3 Euro/minute • Subscribers : millions • Profit : million Euros • ARPU : Euro/month 0,005 0,1 1 3 Price/minute (log scale)

  29. Conclusions - Uses • Pedagogic benefits for advanced students and executive education: • integration and consistency of decisions made in the main business functions • study of technological diffusion • study of key phases in business planning • group work under stress... • Simulations

  30. Conclusions - Perspectives • Now : creation of new scenarios • Short-term : • distance use tools • academic cooperation • Long-term : extension to other telecom services (WLL etc.) is possible • Long-term : adaptation to other network services (pay-TV, banking etc.)

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