tes or vertical services, such as data services, does bring revenue. The key question is: Can we add new subscribers who will use their cellular telephones in the areas where we can grow our networks inexpensively? People use their cellular tele- phones wherever they are, especially when they are away from home, so location of resi- dence is not necessarily a good predictor of location of use. We can target services to the business market, the consumer market, or both, and we can shift that balance in our marketing plan. Marketing ourselves as a national service provider may be a barrier to marketing partic- ular regions intensively. Downloaded from Digital Engineering Library @ McGraw-Hill (www.digitalengineeringlibrary.com) Copyright © 2004 The McGraw-Hill Companies. All rights reserved. Any use is subject to the Terms of Use as given at the website. Regional Growth in a Specific Area Increasing Capacity Marketing through franchises limits our flexibility in marketing by region. We will begin by determining where to encourage demand. We will then discuss how to target growth, returning to the issues discussed here. 45.1 Determining Where to Encourage Demand Not all subscriber demand is equally expensive to serve. We certainly can calculate the cost per unit usage of our wireless telephone system by dividing the entire cost of the system by the total amount of usage. We can use a weighting scheme SO that high-rate data users are recognized as more expensive to serve than voice call subscribers. When the total cost is divided up this way and assigned to each unit of usage, we call that share the allocated cost of the usage. While an allocated-cost model gives a good insight into the fair share of each user of a system, it misses a very important component of system cost analysis, the concept that some usage is far more expensive to provide than other usage. What we want to get a handle on is the extra cost of serving a particular component of the subscriber demand. We ask how much less the system would cost if we