On the economics of GPRS networks with Wi-Fi integration

Abstract Wi-Fi provides an appealing opportunity for GSM/GPRS operators to enhance their data capability. By integrating both networks, operators are able to provide 3G-like services. However, both networks have different data rates and capacity, which makes economics of the network integration and pricing of services a challenging issue. In this paper we introduce a novel pricing model for GPRS networks integrated with Wi-Fi networks. The model identifies how the integration can play a significant role in increasing operators’ overall revenue and potentially improve the performance of GPRS networks. We identify the optimal GPRS charging rate and Wi-Fi connection fee that yields maximum network revenue. In addition, we conduct a case study of a wireless operator that considers network integration, adopting our pricing model. The investment analysis provides the insightful information for profitable business cases of GPRS networks with Wi-Fi integration.

[1]  S. Olivier,et al.  Public WLAN for mobile operators , 2003 .

[2]  Eric J. Friedman,et al.  Pricing WiFi at Starbucks: issues in online mechanism design , 2003, EC '03.

[3]  Angela Doufexi,et al.  Hotspot wireless LANs to enhance the performance of 3G and beyond cellular networks , 2003, IEEE Communications Magazine.

[4]  A. Odlyzko,et al.  Dynamic behavior of differential pricing and quality of service options for the Internet , 1998, ICE '98.

[5]  James Alleman,et al.  A new view of telecommunications economics , 2002 .

[6]  Jen-Shun Yang,et al.  Dynamic scheduling framework on an RLC/MAC layer for general packet radio service , 2003, IEEE Trans. Wirel. Commun..

[7]  Symeon Papavassiliou,et al.  Integration of Pricing with Call Admission Control to Meet QoS Requirements in Cellular Networks , 2002, IEEE Trans. Parallel Distributed Syst..

[8]  Jorma Kilpi,et al.  A portrait of a GPRS/GSM session , 2003 .

[9]  Kalle Ahmavaara,et al.  Interworking architecture between 3GPP and WLAN systems , 2003, IEEE Commun. Mag..

[10]  Katarina Stanoevska-Slabeva,et al.  Exploring the WISP Industry - Swiss Case Study , 2003, Bled eConference.

[11]  Apostolis K. Salkintzis,et al.  WLAN-GPRS integration for next-generation mobile data networks , 2002, IEEE Wirel. Commun..

[12]  A. Damodaran.  Investment Valuation: Tools and Techniques for Determining the Value of Any Asset , 1995 .

[13]  Fotios C. Harmantzis,et al.  An Auction-based pricing model for performance and revenue optimisation in mobile data services , 2006 .

[14]  Lee W. McKnight,et al.  Wireless Internet access: 3G vs. WiFi? , 2003 .