To Help or Disturb: Introduction of Crowdsourced WiFi to 5G Networks

TL;DR

This paper models the economic interaction between 5G and crowdsourced WiFi networks, revealing how pricing strategies adapt to congestion levels and externalities to optimize network performance and user benefits.

Contribution

It introduces the first economic analysis of co-existing 5G and crowdsourced WiFi networks, incorporating user choice with service complementarity and dynamic pricing strategies.

Findings

Severe congestion leads 5G operators to lower prices to promote WiFi offloading.

Crowdsourced WiFi alleviates 5G congestion and benefits operators and users.

Mild congestion causes 5G operators to raise prices, reducing user payoffs.

Abstract

After upgrading to 5G, a network operator still faces congestion when providing the ubiquitous wireless service to the crowd. To meet users' ever-increasing demand, some other operators (e.g., Fon) have been developing another crowdsourced WiFi network to combine many users' home WiFi access points and provide enlarged WiFi coverage to them. While the 5G network experiences negative network externality, the crowdsourced WiFi network helps offload traffic from 5G and its service coverage exhibits positive externality with its subscription number. To our best knowledge, we are the first to investigate how these two heterogeneous networks of diverse network externalities co-exist from an economic perspective. We propose a dynamic game theoretic model to analyze the hybrid interaction among the 5G operator, the crowdsourced WiFi operator, and users. Our user choice model with WiFi's complementarity for 5G allows users to choose both services, departing from the traditional economics literature where a user chooses one over another alternative. Despite of non-convexity of the operators' pricing problems, we prove that the 5G operator facing severe congestion may purposely lower his price to encourage users to add-on WiFi to offload, and he benefits from the introduction of crowdsourced WiFi. However, 5G operator with mild congestion tends to charge users more and all the users' payoffs may decrease.