Application-Oriented Free Data in Cellular Networks

Over the past several years, sponsored mobile data and the payment directions on the Internet have been two major subjects in network economics. Several tier-1 service providers (SPs) created their frameworks for sponsored mobile data by cooperating with content providers. Based on these frameworks, users can have free data transfer if they accomplish a predefined task such as watching advertised videos. In this paper, we investigate particular types of mobile applications that can deliver their data to all cellular users free, even to the users without a data plan. Our approach does not force users to click on advertised content to obtain free data access yet it can still generate a level of revenue for application providers (APs) that can compensate for the revenue loss of the network service provider. We call this approach an Application-Oriented Free Data (AFD) program. To model and analyze the characteristics of the considered framework we use a multi-stage game consisting of cellular users, an SP, and an AP. We solve this game by backward induction. In this way, we define the required thresholds of price and data usage for an AFD program. The feasibility of the AFD program is illustrated by several numerical examples.