On the Introduction of Diffusion Uncertainty in Telecommunications’ Market Forecasting
Long-run forecasts of telecommunication services’ diffusion play an important role in policy, regulation, planning and portfolio decisions. Forecasting diffusion of telecommunication technologies is usually based on S-shaped models, mainly due to their accurate long-term predictions. Yet, the use of these models does not allow the introduction of risk in the forecast. In this paper, a methodology for the introduction of uncertainty in the underlying calculations is presented. It is based on the calibration of an Ito stochastic process and the generation of possible forecast paths via Monte Carlo Simulation. Results consist of a probabilistic distribution of future demand, which constitutes a risk assessment of the diffusion process under study. The proposed methodology can find applications in all high-technology markets, where a diffusion model is usually applied for obtaining future forecasts.