Economic feasibility of virtual operators in 5G via network slicing

TL;DR

This paper analyzes the economic feasibility of virtual operators in 5G network slicing, proposing two business models and using game theory and queue modeling to evaluate incentives and user subscription rates.

Contribution

It introduces two novel business models for virtual operators in 5G slicing and models their economic and system interactions using game theory and queue analysis.

Findings

Network operator can be incentivized to serve virtual operators' users.

Strategic model yields higher user subscription rates.

Economic incentives can align operator and user interests.

Abstract

The provision of services by more than one operator over a common network infrastructure, as enabled by 5G network slicing, is analyzed. Two business models to be implemented by a network operator, who owns the network, and a virtual operator, who does not, are proposed. In one business model, named \emph{strategic}, the network operator provides service to its user base and the virtual operator provides service to its user base and pays a per-subscriber fee to the network operator. In the other business model, named \emph{monopolistic}, the network operator provides service to both user bases. The two proposals are analyzed by means of a model that captures both system and economic features. As regards the systems features, the slicing of the network is modeled by means of a Discriminatory Processor Sharing queue. As regards the economic features, the incentives are modeled by means of the user utilities and the operators' revenues; and game theory is used to model the strategic interaction between the users' subscription decision and the operators' pricing decision. In both business models, it is shown that the network operator can be provided with the appropriate economic incentives so that it acquiesces in serving the virtual operator's user base (monopolistic model) and in allowing the virtual operator to provide service over the network operator's infrastructure (strategic model). From the point of view of the users, the strategic model results in a higher subscription rate than the monopolistic model.