Telecommunications Construction Project Investment Appraisal Analysis

This article discusses the investment analysis research of telecommunication infrastructure projects.First of all, traditional investment evaluation methods are introduced, which include evaluation principal and evaluation criteria, as well as the comparison among different evaluation criteria. However, because of the uniqueness of the telecommunication infrastructure projects, such as " whole network " and " progressive expansion " , to evaluate investment of telecommunication infrastructure projects with "net present value" would produce some problems, which mainly include the difficulty of determining the amount of cash flow and the inadvisable setting of analysis period and discount rate. This article briefly describes the cause and effect of these problems.In the second chapter, the author emphasizes on the research of difficulty of determining the cash flow of telecommunication infrastructure projects.As to determining the earning, this article thoroughly analyzes the current method of redistribution of income, and discovers some problems, and introduces 'internal transferable price' to help determine the income of telecommunication infrastructure projects, as well. This article methodically explains the general idea, exact method of calculation and implementation of'internal transferable price theory.'In addition, concerning to the problem of inaccurate estimation of operational cost, this article introduces 'activity-based cost' to increase the precision of estimated operational cost.At last, in order to illuminate the operability of the two new resolutions, I simulate an investment evaluation according to a real case.In the third chapter, this article generalizes the frame and procedure of investment evaluation of telecommunication infrastructure projects, and highlights the necessity and importance of risk analysis. Furthermore, the author solves the problems, such as the inaccurate determination of analysis period and discount rate, with the aid of risk analysis.In conclusion, to the uniqueness of telecommunication infrastructure projects,"progressive expansion ""continuous construction", I suggest that macro analysis oftelecommunication projects investment should be emphasized. The initialimplementation and the following expansion need to be evaluated together, therefore we can make more accurate evaluation of investment decision.