Abstract: Telecommunications license has uncertainties and high investment and financing risks. The value of its flexible management is also hard to measure. The traditional appraisal and decision-making methods are obviously defective, often leading to undervaluation and thus missing out on opportunities on the part of decision makers. Based on the option theory, the analysis framework is constructed to assess the assets, as the telecommunication license. The 4G program of China Mobile Limited (stock code:0941) is taken as a case. Through the comparative analysis, the results show that the traditional method has obvious value leakage, and the leakage rate is as high as 50.3%. But real option method can very good to make up for the defect, and more completely and objectively reflects the true value of such assets. It can provide effective support for the asset class of investment decision-making.

Key words: real option, telecommunications license, the analysis of investment value