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 substitution processes in a competitive market. We show how a conceptual model of the UK mobile telecommunications industry, based on entities and their relationships, can be translated into a dynamic simulation model. The model focuses on two conflicting pressures, namely, the need to migrate customers from the analogue to the digital network versus the need to invest in expanding coverage and capacity of the digital network. The model allows an exploration of determinants of customer choice and how these can be affected by the strategies followed. Thus, management decision variables are endogenous to the model and there are feedback mechanisms between decisions and the 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.