Exercise 33: WiMAX as a disruptive technology

So far so good. If you vary the global inputs as constants within the obvious bounds, then the model works well. Unfortunately, real life is rarely so simple: business opportunities often arise as a consequence of change and timing, and now we will demonstrate the limitations of the original setup.

If you have changed the inputs or global data in Exercises 31 or 32, then close the model and re-open WiMAX-DSL02. Otherwise, just continue from WiMAX-DSL32.

Suppose WiMAX is not available at the start of the model (2006), but is instead introduced in 2010. Without regard for the network roll-out plan, let’s see what happens to the market calculation.

1. Change the Variant data for the Dual technology scenario such that Do WiMAX becomes an Interpolated Series with initial value 0 and then 1 from 2010.
2. Set the input Step = Indefinite to prescribe an immediate launch.

3. Graph this input directly in the Editor to make sure it is working as you expect.

When an input is end-aligned, indefinite steps run back from the end of the given period, as opposed to forward from the beginning as we saw for the age factor in Exercise 29: Varying costs with the age of a resource. So the first period here really must be 2009, whereas with beginning alignment you could ‘get away’ with 2006.

4. Use the pre-defined view Access technology to quickly verify the market results.

What is wrong with the simple market model?

On a similar theme, suppose a new release of the DSL technology makes longer copper loops more viable from 2013?

5. Make a similar change to the Reach prop input to increase from 0.6 to 0.9 in 2013, and re-run the model (Data menu/User Data).

The change is less pronounced, but now the simple model shows a small proportion of WiMAX customers migrating immediately to DSL in 2013.

In both cases, a change in available technology will take some time to percolate through the market. Existing DSL subscribers may never change to WiMAX if they are already happy with their DSL setup, and the small proportion of WiMAX customers who suddenly find themselves newly in reach from 2013 will also take some persuasion to make the switch.