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Economics of Wireless Networks The field of mobile wireless communications is currently one of the fastest growing segments of the telecommunications industry. Wireless devices have nowadays found extensive use and have become an indispensable tool on the everyday life of many people, both the professionally and personally. To gain insight into the momentum of the growth of the wireless industry, it is sufficient to state the tremendous growth in the number of worldwide subscribers of wireless systems. This figure has risen from only one mobile subscriber per 100 inhabitants worldwide in 1990 to 26 subscribers per 100 inhabitants in 1999 and. | Wireless Networks. P. Nicopolitidis M. S. Obaidat G. I. Papadimitriou and A. S. Pomportsis Copyright 2003 John Wiley Sons Ltd. ISBN 0-470-84529-5 14 Economics of Wireless Networks Introduction The field of mobile wireless communications is currently one of the fastest growing segments of the telecommunications industry. Wireless devices have nowadays found extensive use and have become an indispensable tool on the everyday life of many people both the professionally and personally. To gain insight into the momentum of the growth of the wireless industry it is sufficient to state the tremendous growth in the number of worldwide subscribers of wireless systems. This figure has risen from only one mobile subscriber per 100 inhabitants worldwide in 1990 to 26 subscribers per 100 inhabitants in 1999 and the growth continues. This increasing number of subscribers is obviously reflected in monetary terms as well. For example in the United States alone the wireless industry has grown from a billion dollar industry in 1992 to a 40 billion dollar industry in 2000 1 . Over the same period the revenues from mobile services grew at an annual rate of 28 a lot higher than the 7 rate achieved by the telecommunications industry excluding the wireless sector. It can be easily seen that with such growth rates it is just a matter of time before the use of wireless systems surpasses that of wireline systems. In fact this transition has already taken place in some countries such as Korea where wireless telephony has replaced fixed telephony as the primary means of telecommunication 1 . As far as the near future is concerned it is estimated that the growth of the wireless industry will continue although at a slower rate 1 . Although there are predictions that bring the number of worldwide wireless subscribers to 2 billion by 2010 this may be difficult to achieve due to economic and social issues. The increase in the number of subscribers between 1984 and 2000 is mainly due to .