Strategic Interaction between Operators in the Context of Spectrum Sharing for 5G Networks

Abstract

5G networks will make network sharing agreements between mobile operators technically possible. However, depending on the agreed and implemented quality-of-service isolation, the provision of services may lead to unsustainable business cases. In this paper, the economic feasibility of such arrangements is analyzed for the case of two operators. Concretely, while one network operator owns the spectrum, one virtual operator does not, and each one provides service to its subscriber base. Two sharing alternatives, namely, pooling and priority sharing, are studied regarding the profits that each operator gets. We conclude that the network operator is worse off under any circumstances under a pooling agreement, while a lump sum payment may leave the network operator better off under a priority sharing agreement.

Game Theoretical Analysis of a Multi-MNO MVNO Business Model in 5G Networks

“…When K 2 increases from 0 to 1 and q > 0, λ decreases as shown in Figure A3b; i.e., the MVNO users mean arrival rate depends on the MNOs network capacity. The described behaviour is consistent with the analysis performed in Proposition 1 for α 1 ∈ (0, 1), the values that λ can take are defined by Equation (12) Figure A4 shows MNOs profits as a function of K 2 and different values of q and K 1 = 0.45. MNO 2 profits decrease when K 2 increases from 0 to 1; this is due to the decrease in network capacity offered by MNO 2.…”

“…λ * decreases when K i increases from 0 to 1 and q also increases as shown in Figure 3b. The described behaviour is consistent with the analysis performed in Proposition 1 for α 1 ∈ (0, 1), the values that λ can take are defined by Equation (12). Figure 5 shows MNOs profits as a function of K i with different values of q. MNOs profits decrease when MNOs investment costs increase as shown in Figure 5a,b.…”

“…The utility of the alternative option, i.e., no subscribing, is set to zero, i.e., u 0 = 0. Note that a similar approach for modeling the user utility can be found in, e.g., [12,47,48,58,59]. Moreover, this form of utility function can be related to the quasi-linear function widely used in microeconomic and telecommunications networks analysis [27].…”

“…Additionally, notice that g(•) is strictly concave, therefore all its roots are strictly positive. However, there is only one root in [0, min(µ 1 /α 1 , µ 2 /(1 − α 1 ))), hence, we use the classical expression for the smallest root of a degree-two polynomial, and a bit of algebra, to get the expression in Equation (12).…”

“…Such a sharing agreement requires MNOs to consider the impact on their revenue by enabling the MVNO to select the proportion of network resources that it will contract with each MNO. The key elements to convince MNOs regarding entry with an MVNO is the access fee for MNO resource use and limiting the limitation of MVNO's priority to access MNOs' infrastructure [12].…”