Multistage stochastic programming in strategic telecommunication network planning

Mobile communication is taken for granted in these days. Having started primarily as a service for speech communication, data service and mobile Internet access are now driving the evolution of network infrastructure. Operators are facing the challenge to match the demand by continuously expanding and upgrading the network infrastructure. However, the evolution of the customer's demand is uncertain. We introduce a novel (long‐term) network planning approach based on multistage stochastic programming, where demand evolution is considered as a stochastic process and the network is extended so as to maximize the expected profit. The approach proves capable of designing large‐scale realistic UMTS networks with a time horizon of several years. Our mathematical optimization model, the solution approach, and computational results are presented.