Game-theoretic evaluation of competing wireless access networks for offering Mobile Internet
Last modified: 2009-10-27
Abstract
In this paper a complete business case for the rollout of a municipal wireless access network for offering Mobile Internet is evaluated. Two different business players, a municipality deploying a WiFi network and a mobile virtual network operator (MVNO) offering 3G femtocells, are considered. A case study is performed in the city of Ghent (Belgium) and different customer classes and service offers are defined. First of all, a net present value (NPV) analysis is elaborated for the two stand-alone cases in order to estimate their economic viability. For both players, a positive business case is found in the city centre of Ghent. In a second step, the influence of competition between these two market players is modelled by applying game theory. The optimal rollout strategy as well as the price setting for both players is evaluated. Due to the high initial investments for deploying WiFi access points throughout the whole city, the municipality tends to postpone its rollout one or two years, whereas the 3G femtocell operator will start as soon the technology allows a mass deployment. Regarding the price setting strategy, both players balance each other leading to slightly higher service tariffs, when no extra competitors are considered.
Full Text: PDF