Using object-oriented simulation to explore substitution between technologies: An application to the UK mobile telecommunications industry

This paper discusses how an object-oriented simulation model can explore su bstitution processes in a competitive market. We show how a conceptual mode l of the UK mobile telecommunications industry, based on entities and their relationships, can be translated into a dynamic simulation model. The mode l focuses on two conflicting pressures, namely, the need to migrate custome rs from the analogue to the digital network versus the need to invest in ex panding coverage and capacity of the digital network. The model allows an e xploration of determinants of customer choice and how these can be affected by the strategies followed. Thus, management decision variables are endoge nous to the model and there are feedback mechanisms between decisions and t he migration speed. We examine different strategies for migrating customers from analogue to digital mobile networks and discuss the benefit of using such models. (C) 1999 Elsevier Science Inc.