Deployment Strategies in Competitive Wireless Access Networks

Abstract—The rapid growth of mobile internet traffic has forced wireless service providers to deploy increasingly higher capacity in their wireless broadband access systems. The flat rate revenue streams in combination with the rapidly growing costs associated with conventional access deployment is usually referred to as the “revenue gap”. In this context, various schemes for infrastructure sharing to reduce unnecessary duplication of infrastructure present an interesting solution. Besides explicit cooperation, competitive sharing (“coopetition”) where various access providers provide partially overlapping coverage is one interesting sharing mechanism. In this paper, we analyze such a scheme and study how the operator should deploy their networks, striking a balance between areas of exclusive coverage, where each provider has a monopoly situation, and overlap areas with provider competition, to achieve maximal profitability. The com-petition is based on the proportionally fair auction scheme. The users behave selfishly as they bid for the various access providers. The access providers compete with each other by selecting the so called reservation price. Results are expressed in terms of Nash equilibrium solutions, which are numerically derived for some sample scenarios. Results indicate that the fraction of coverage overlap does play an important role for both the performance of the system and the profitability of the service providers. As the level of overlap between the two networks increases the revenue that each base station gets decreases significantly. In addition, the user experienced throughput degrades considerably for low demand but the cost per transferred Megabyte is not greatly affected. Further, we conclude that a win-win situation for both users and access providers can be achieved with a suitable overlap coverage by two networks. Index Terms—Wireless access markets; coverage overlap; com-petition; resource allocation; Nash equilibriu