Effect of Failures on Stock Price of Telecommunication Service Providers

Abstract

This paper reports the results of a new test on what types of failure cause falls in the stock prices of telecommunication service providers. This analysis of stock price is complementary to our previous one on market share. A clear result of our new test is that the type of failure causing falls in stock price is different from the type causing decline in market share. Specifically, the previous study identified frequent failures as causes of decline in market share, while the current study indicates large failures affecting many users as causes of falls in stock price. Together, these analyses give important information for reliability designs of telecommunications networks.