The Community for Technology Leaders
RSS Icon
Issue No.11 - Nov. (2013 vol.12)
pp: 2261-2273
Lingjie Duan , Singapore University of Technology and Design, Singapore
Jianwei Huang , The Chinese University of Hong Kong, Hong Kong
Biying Shou , City University of Hong Kong, Hong Kong
Femtocells can effectively resolve the poor connectivity issue of indoor cellular users. This paper investigates the economic incentive for a cellular operator to add femtocell service on top of its existing macrocell service. We model the interactions between a cellular operator and users as a Stackelberg game: The operator first determines spectrum allocations and pricings of femtocell and macrocell services, and then heterogeneous users choose between the two services and the amount of resource to request. In the ideal case where the femtocell service has the same full spatial coverage as the macrocell service, we show that the operator will choose to provide femtocell service only, as this leads to a better user quality of service and a higher operator profit. However, if we impose the constraint that no users' payoffs decrease after introducing the femtocell service, then the operator will always continue providing the macrocell service (with or without the femtocell service). Furthermore, we study the impact of operational cost, limited coverage, and spatial reuse on femtocell service provision. As the operational cost increases, fewer users are served by femtocell service and the operator's profit decreases. When the femtocell service has limited spatial coverage, the operator always provides the macrocell service beside the femtocell service. However, when the coverage is high or the total resource is low, the operator will set the prices such that all users who can access femtocell will choose to use the femtocell service only. Finally, spatial reuse of spectrum will increase the efficiency of femtocell services and gives the operator more incentives to allocate spectrum to femtocells.
Macrocell networks, Bandwidth, Pricing, Games, Resource management, Economics, Educational institutions,subgame perfect equilibrium, Femtocells, macrocells, microeconomics, Stackelberg game
Lingjie Duan, Jianwei Huang, Biying Shou, "Economics of Femtocell Service Provision", IEEE Transactions on Mobile Computing, vol.12, no. 11, pp. 2261-2273, Nov. 2013, doi:10.1109/TMC.2012.193
[1] L. Duan and J. Huang, "Economic Viability of Femtocell Service Provision," Proc. Int'l Conf. Game Theory for Networks (GameNets), Apr. 2011.
[2] J.H. Schiller, Mobile Communications. Addison Wesley, 2003.
[3] H. Shen and T. Basar, "Optimal Nonlinear Pricing for a Monopolistic Network Service Provider with Complete and Incomplete Information," IEEE J. Selected Areas in Comm., vol. 25, no. 6, pp. 1216-1223, Aug. 2007.
[4] R.B. Myerson, Game Theory: Analysis of Conflict. Harvard Univ., 2002.
[5] "Electronic Frontier Foundation (EFF) Wireless Friendly ISP List," wireless_friendly_isp_list.html , 2013.
[6] "Speakeasy NetShare," http://www.speakeasy.netnetshare, 2013.
[7] H. Claussen, L.T.W. Ho, and L.G. Samuel, "An Overview of the Femtocell Concept," Bell Labs Technical J., vol. 13, no. 1, pp. 221-245, 2008.
[8] V. Chandrasekhar, J. Andrews, and A. Gatherer, "Femtocell Networks: A Survey," IEEE Comm. Magazine, vol. 46, no. 9, pp. 59-67, Sept. 2008.
[9] S.-P. Yeh, S. Talwar, S.-C. Lee, and H. Kim, "WiMAX Femtocells: A Perspective on Network Architecture, Capacity, and Coverage," IEEE Comm. Magazine, vol. 46, no. 10, pp. 58-65, Oct. 2008.
[10] J.D. Hobby and H. Claussen, "Deployment Options For Femtocells and Their Impact on Existing Macrocellular Networks," Bell Labs Technical J., vol. 13, no. 4, pp. 145-160, 2009.
[11] T. Nguyen, H. Zhou, R.A. Berry, M.L. Honig, and R. Vohra, "The Impact of Additional Unlicensed Spectrum on Wireless Services Competition," Proc. IEEE Symp. New Frontiers in Dynamic Spectrum Access Networks (DySPAN), 2011.
[12] E. Altman, A. Kumar, C. Singh, and R. Sundaresan, "Spatial SINR Games Combining Base Station Placement and Mobile Association," Proc. IEEE INFOCOM, 2009.
[13] H. Inaltekin, T. Wexler, and S.B. Wicker, "A Duopoly Pricing Game for Wireless IP Services," Proc. Fourth Ann. IEEE Comm. Soc. Conf. Sensor, Mesh and Ad Hoc Comm. and Networks, 2007.
[14] K. Leung and J. Huang, "Regulating Wireless Access Pricing," Proc. IEEE Int'l Conf. Comm., 2011.
[15] L.T.W. Ho and H. Claussen, "Effects of User-Deployed, Co-Channel Femtocells on the Call Drop Probability in a Residential Scenario," Proc. IEEE Int'l Symp. Personal, Indoor and Mobile Radio Comm., 2007.
[16] N. Shetty, S. Parekh, and J. Walrand, "Economics of Femtocells," Proc. IEEE Global Comm. Conf., 2009.
[17] P. Lin, J. Zhang, Y. Chen, and Q. Zhang, "Macro-Femto Heterogeneous Network Deployment and Management: From Business Models to Technical Solutions," IEEE Wireless Comm., vol. 18, no. 3, pp. 64-70, June 2011.
[18] M. Latham, "Consumer Attitudes to Femtocell Enabled in-Home Services C Insights from a European Survey," FemtoCells Europe, 2008.
[19] J.-S. Wu, J.-K. Chung, and M.-T. Sze, "Analysis of Uplink and Downlink Capacities for Two-Tier Cellular System," IEE Proc. Comm., vol. 144, no. 6, pp. 405-411, Dec. 1997.
[20] V. Chandrasekhar and J. Andrews, "Uplink Capacity and Interference Avoidance for Two-Tier Cellular Networks," Proc. IEEE Global Comm. Conf., pp. 3322-3326, Nov. 2007.
[21] L.W. McKnight and J.P. Bailey, Internet Economics. MIT, 1998.
[22] J. Yoon, J. Lee, and H.S. Lee, "Multi-Hop Based Network Synchronization Scheme for Femtocell Systems," Proc. IEEE Int'l Symp. Personal, Indoor and Mobile Radio Comm., 2010.
[23] R.Y. Kim, J.S. Kwak, and K. Etemad, "WiMax Femtocell: Requirements, Challenges, and Solutions," IEEE Comm. Magazine, vol. 47, no. 9, pp. 84-91, Sept. 2009.
[24] L. Benmesbah, B.W.K. Ling, V. Chandrasekhar, X. Chu, and M. Dohler, "Decentralized Spectral Resource Allocation for OFDMA Downlink of Coexisting Macro/Femto Networks Using Filled Function Method," Proc. Seventh Int'l Symp. Comm. Systems Networks and Digital Signal Processing (CSNDSP), 2010.
[25] S. Rangan, "Femto-Macro Cellular Interference Control with Subband Scheduling and Interference Cancelation," Proc. IEEE Global Comm. Conf., 2010.
[26] C.W. Tan, "Optimal Power Control in Rayleigh-Fading Heterogeneous Networks," Proc. IEEE INFOCOM, 2011.
[27] Z. Shi, H. Wang, M. Zhao, and M.C. Reed, "An Uplink Analytical Model for Two-Tiered 3G Femtocell Networks," Proc. Int'l Symp. Modeling and Optimization in Mobile, Ad Hoc and Wireless Networks (WiOpt), 2010.
[28] L. Ho and H. Claussen, "Effects of User-Deployed, Co-Channel Femtocells on the Call Drop Probability in a Residential Scenario," Proc. IEEE Int'l Symp. Personal, Indoor and Mobile Radio Comm., pp. 1-5, Sept. 2007.
[29] H. Claussen, L. Ho, and L. Samuel, "Financial Analysis of a Pico-Cellular Home Network Deployment," Proc. IEEE Int'l Conf. Comm., pp. 5603-5609, June 2007.
[30] S. Yun, Y. Yi, D. Cho, and J. Mo, "Open or Close: On the Sharing of Femtocells," Proc. IEEE INFOCOM Mini-Conf., Apr. 2011.
[31] Y. Chen, J. Zhang, and Q. Zhang, "Utility-Aware Refunding Framework for Hybrid Access Femtocell Network," IEEE Trans. Wireless Comm., vol. 11, no. 5, pp. 1688-1697, May 2012.
[32] W.Y.K. Chiang, D. Chhajed, and J.D. Hess, "Direct Marketing, Indirect Profits: A Strategic Analysis of Dual-Channel Supply-Chain Design," Management Science, vol. 49, no. 1, pp. 1-20, 2003.
[33] A.A. Tsay and N. Agrawal, "Channel Conflict and Coordination in E-Commerce Age," Production and Operations Management, vol. 13, no. 1, pp. 93-110, 2004.
[34] C. Courcoubetis and R. Weber, Pricing Communication Networks: Economics, Technology and Modeling. Wiley, 2003.
[35] M. Reardon, "Verizon Looks for More Revenue in Wireless Data," CNET News, us-verizon-pricing-idUSTRE75K49620110621 , 2013.
[36] J. Altmann and K. Chu, "How to Charge for Network Services— Flat-Rate or Usage-Based?" Computer Networks, vol. 36, nos. 5/6, pp. 519-531, 2001.
[37] Proc. China Femtocell Symp., , Sept. 2011.
[38] "AT&T 3G Micocell Frequently Asked Questions," 3gmicrocell.jsp?fbid= 2RqBuNua27C#faqs, 2013.
[39] A. Mas-Colell, M.D. Whinston, and J.R. Green, Microeconomic Theory, vol. 1, Oxford Univ., 1995.
[40] W.C. Cheung, T.Q.S. Quek, and M. Kountouris, "Throughput Optimization, Spectrum Allocation, and Access Control in Two-Tier Femtocell Networks," IEEE J. Selected Areas in Comm., vol. 30, no. 3, pp. 561-574, Apr. 2012.
[41] L. Duan, B. Shou, and J. Huang, "Capacity Allocation and Pricing Strategies for Wireless Femtocell Services,", 2012.
87 ms
(Ver 2.0)

Marketing Automation Platform Marketing Automation Tool