Mobile Data Offloading with Uniform Pricing and Overlaps

Mobile data offloading is an emerging technology to alleviate cellular network congestion and improve user service quality. In this paper, we investigate the economics of mobile data offloading through access points (APs) deployed by small cell service providers (SSPs), implementing uniform volume prices for all the mobile users (MUs) in each SSP's coverage including the overlapping area. In particular, we consider a data offloading game with a single mobile network operator (MNO) and two SSPs with overlapping coverage areas, where each SSP announces a uniform price for serving the cellular traffic within its coverage, and the MNO determines the traffic volumes to offload. We show that there is no pure Nash equilibrium (PNE) under such price competition, and determine the corresponding mixed strategy Nash equilibrium (MNE) using price randomization. As a practical solution, we propose a simple one shot auction mechanism that is easy to implement and has PNEs which is payoff equivalent with the MNE under price competition. We believe that this simple mechanism due to its simplicity of determining the equilibrium prices could be used in the negotiation between the SSPs and the MNO to determine the average service prices. Finally, we study the strategic topological infrastructure placement problem using a 1-dimension (1D, linear) user traffic flow model and a 2-dimension (2D) user traffic flow model when SSPs compete assuming uniform price competition as above. We show that the first mover in the placement problem will deploy its APs to cover more than half of the total flow volume and has an advantage to obtain a higher equilibrium payoff.

1 Introduction

We are witnessing an unprecedented worldwide growth of mobile data traffic that is expected to continue at an annual rate of 45 percent over the next few years, surpassing 30 exabytes per month by 2020 [1]. Traditional network capacity expansion methods such as network technology upgrades and additional spectrum acquisition are costly, time-consuming, and outpaced by the continuing traffic increase. Mobile data offloading is a promising approach to utilize certain complementary transmission technologies to deliver mobile traffic originally targeted to cellular networks. A large number of studies have investigated the potential benefits of mobile data offloading and various innovative schemes have been proposed to better manage data flows including WiFi [2], [3], [4], [5], femtocells [6], [7], [8], and opportunistic offloading [9], [10]. It is shown that in a typical urban environment, WiFi can offload about 65 percent cellular traffic and save 55 percent battery energy for mobile users (MUs) [3]. This performance gain can be further enlarged with the use of delaying transmission [11], [12]. The authors in [13], [14] investigated the network operators’ profit gains from offering dual services through both macrocells and femtocells. All of these studies have shown that mobile data offloading is a cost-effective and energy-prudent approach to resolve network congestion and improve user service quality.