Hybrid Pricing for Mobile Collaborative Internet Access

TL;DR

This paper introduces a hybrid pricing model for mobile collaborative internet access that aligns user tethering decisions with network management, improving profits and user benefits through strategic equilibrium analysis.

Contribution

It proposes a novel hybrid pricing framework for MNOs, analyzes equilibrium strategies in cooperative and competitive scenarios, and demonstrates potential profit and payoff improvements.

Findings

Hybrid pricing can double MNO profits and user payoffs.

Equilibrium exists in quantity competition but not always in pricing game.

Hybrid schemes adapt to network heterogeneity, enhancing benefits.

Abstract

Mobile Collaborative Internet Access (MCA) enables mobile users to share their Internet through flexible tethering arrangements. This can potentially make better use of network resources. However, from a mobile network operator's (MNO's) viewpoint, it can either reduce revenue or increase congestion, and thus has been blocked by some MNOs in practice. We propose a hybrid pricing framework for MNOs who charge users separately for access and tethering. This scheme serves to coordinate the tethering decisions of mobile users with MNO network management objectives. We analyze the MNOs' equilibrium pricing strategies in both cooperative and competitive scenarios. In the cooperative scenario, at the equilibrium, each user's cost is independent of any chosen tethering links. We then characterize the optimal hybrid pricing strategies of MNOs in this scenario. For the competitive scenario, we formulate the MNOs' competitive interactions as a pricing game, and we show that MNO competition leads to equalized prices for users if an equilibrium exists but does not guarantee its existence. Both insights motivate a quantity competition game, which is shown to guarantee an equilibrium. Simulation results show that in scenarios of interest the proposed hybrid pricing schemes can double both MNOs' profit and users' payoff and such improvements increase with the degree of network heterogeneity.