User Remuneration Under Congestion: A Dynamic and Fair Pricing Strategy for Wireless Networks

Network economics play an important role in managing quality of service (QoS) for wireless networks as well as in managing the unprecedented growth in mobile data traffic. By employing appropriate pricing strategies, wireless service providers (WSPs) can provide incentives to users to allow the best match between user needs and WSP offerings with the objective of maximizing both operator revenue and customer social welfare. We propose a dynamic and fair (D&F) pricing strategy in which users are charged based on both the quantity of data consumed as well as the achieved QoS. The D&F pricing strategy allows users to dynamically increase or decrease the quantity and quality of data consumed over the network. Since users pay based on their achieved quality, as opposed to the quality they requested in their subscription, they are fairly charged even during congestion. We present (a) an economic analysis for illustrating the pricing dynamics between users and WSPs and (b) a game-theoretic analysis between competing WSPs, to illustrate how the D&F pricing strategy can produce increased overall revenue.