Project #56300 - Economic Investment Analysis

1. Instructions

Objective    Analyze publicly available data and conduct economic analysis to determine under what circumstances (at what price) it is worthwhile to invest in Wind Mobile.

Detailed Introduction   

In this fourth and final assignment you are asked to advise an investment firm whether or not – or under what circumstances – to invest into Wind Mobile. You have to support your recommendation with an argument based on economic reasoning and data.   Continuing with the specific setâ€Âup from the third assignment, a few weeks after you sent your original proposal to Mr. van Hanebanker, you receive the email shown below from you friend/mentor.


Responding to the email (email at the end of the page), prepare an investment report on Wind Mobile based on economic analysis  

- 8-12 pages + executive summary

- 3-5 economic aspects

- Argument supported by data analysis

- With clearly stated recommendation whether/ under what circumstances/ at what price you recommend investing in Wind Mobile


To help you manage your time on this project, I recommend you create a time table for completion of the following

- Create a list of topics you want to look into

- Perform data analysis

- Flash out your conclusion/ recommendation

Create a first draft for the paper

- Write executive summary

- Revise and polish


Email !!!

Email from Mr. van Hanebanker  

Dear friend, Thank you for you proposal and sorry for me not writing back sooner. My partners and I had a heated debate, but thanks to the arguments you provided I was able to convince them – both to consider whether to invest in Wind Mobile in more detail and that you are the best person to prepare the necessary analysis. We can offer you a fixed fee or a percentage of the transaction if we go forward, or a combination of the two as compensation. You can let me know later what you prefer.

I have known you for a few years know, but admittedly I was impressed by the proposal and the depth of your understanding of the underlying economics. Going forward, can you estimate the Lerner Index of the Wireless Communication Industry? The mark-up? How both are expected to change if Wind Mobile makes a move? Do you have any idea what the mark-up is in the US? How have companies been able to protect it? Can the strategy be replicated in Canada? Also, do you think Wind Mobile should focus on the metropolitan areas first where it faces more competition or expand to the less urban areas first? You mentioned last time that you are worried that there might be natural monopolies for Wireless Communication Industry in some provinces that might be difficult to break into. You know the industry better than I do – are there any technological changes on the horizon that would lower the high infrastructure investment necessary every step of the way? So many questions … I admit that I am not even sure half of them made sense to you, but I hope you understand my intent. I trust your judgment to provide us a complete economic investment analysis.

As you know, spectral auctions are starting in March and continue through April. Wind Mobile has set us an April 15th deadline for reaching an agreement, so we need to start negotiating no later than early March. If it turns out that we are not interested, I want to be able to let Wind know before the March auction begins. I know you usually need more time, but do you think you can complete the analysis and report by February 26th? (Also, if you could send me a preliminary version by the 12th, that would be terrific.)

I hope this email finds you well as always. Yours, Liu

PS: Tonys interview with CBC's The Exchange with Amanda Lang in December went well, dont you think?

Subject Business
Due By (Pacific Time) 02/12/2015 12:00 am
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