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Economic analysis
Supply and Demand Analysis in Convergent Networks

by

Craig Thompson

Bachelor of Engineering (Honors)
University of New South Wales, 1994

SUBMITTED TO THE SLOAN SCHOOL OF MANAGEMENT IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF

MASTER OF BUSINESS ADMINISTRATION

AT THE
MASSACHUSETTS INSTITUTE OF TECHNOLOGY

JUNE 2001

© 2001 Craig Thompson. All rights reserved
The author hereby grants to MIT permission to reproduce and to distribute publicly paper and electronic copies of this thesis document in whole or in part.

Signature of Author: _____________________________________________________________
Department of Management
April 9, 2001

Certified by: ___________________________________________________________________
Charles H. Fine
Chrysler LFM Professor of Management
Thesis Supervisor

Accepted by: ___________________________________________________________________
Margaret Andrews
Executive Director of the Sloan MBA Program
Supply and Demand Analysis in Convergent Networks

by

Craig Thompson

Submitted to the Sloan School Of Management on April 9, 2001 in
Partial Fulfillment of the Requirements for the Degree of Master Of
Business Administration

Abstract

This thesis examines the issue of bandwidth supply and demand in converging communications networks. Bandwidth is defined as the amount of data that can be transmitted in a fixed amount of time, and is usually expressed in bits-per-second. The huge growth in data communications as a result of the growth in the Internet, other public and private data networks, the continued growth in voice traffic and the potential introduction of bandwidth-intensive services such as Video-on-Demand, has raised some interesting questions about the dynamics of supply and demand in the next generation of communications networks.
While many estimates exist for bandwidth supply and demand, there is still confusion about the relationship

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