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
• Simulations
• Conclusions & perspectives
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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)
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Timeline
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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
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Development Guidelines
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Flexibility, technology-neutral
Learning-oriented
Trade-off « playability »/ realism
Modular & easy to maintain
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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)
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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
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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)
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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
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Model Architecture
Marketing
HR
Network
Finance
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Block 1 : Game Core
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Diffusion function (« contagion »)
Operator service plans
Customer satisfaction function
Market Share function (Logit-like)
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Block 1 : Game Core
Service Plans
Demographics,
Customer Behavior
Network quality,
Clients (last period)
CORE
Terminals
Sales
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Salable
Minutes
Customers
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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)
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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
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Operators : Service Plans (2)
• For one or two geographic zones (part coverage possible)
• Do not require building its own network (MVNO possible)
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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
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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
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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.
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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
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Block 2 : Networks
Traffic forecasts
(own & MVNO)
Salable Minutes
(or Mo)
Existing network
NETWORK
Minutes (Mbytes)
sold
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Network
Quality
Network
changes & costs
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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...
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Block 3 : Human Resources
Wages, Hires, ,
redundancies, transfers,
promotions…
Labor
market
Labor relations,
Company profitability
HRM
Labor
Quality
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Staffing
Labor costs
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Block 4 : Finance
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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
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Block 4 : Finance
Minutes et MBytes sold
Terminals sold
Staff,
networks
Unit costs (rents, taxes, interco,
licenses, interest rates…)
FINANCE
Financial results
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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
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Example : network congestion
1,2
1
M Erlangs
0,8
hourly traffic
network capacity
0,6
0,4
23
21
19
17
15
13
11
9
7
5
3
0
1
0,2
hours
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Business Simulations
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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
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Example : Price simulation
• with 2 prepaid operators and
prices varying 0,005 to 3
Euro/minute
150
100
50
0
• Subscribers : millions
• Profit : million Euros
• ARPU : Euro/month
-50
00,005
0,1 5 1 3
-100
-150
10
Price/minute
(log scale)
-200
Subscribers
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Profit
ARPU
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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
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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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