Technological investment games among wireless telecommunications service providers

Abstract

SUMMARYWith the development of new technologies in a competitive context, infrastructure investment and licence purchase as well as existing technology maintenance are crucial questions for current and emerging operators. This paper presents a three-level game analyzing this problem. At the highest level, the operators decide on which technologies to invest, given that some may already own licences or infrastructures. We limit ourselves to the realistic case where technologies are 3G, WiFi and WiMAX. At the intermediate level, with that set of operated technologies fixed, operators determine their service price. Finally, at the lowest level, customers choose their provider depending on the best combination of price and available quality of service. At each level, the best decision of actors depends on the actions of others, the interactions hence requiring to be studied as a (noncooperative) game. The model is analyzed by backward induction, meaning that decisions at a level depend on the equilibria reached at the lower levels. Different real-life cost scenarios are studied. Our model aims at helping both the operators to make their final decision on technological investments, and the regulator to determine a proper licence fee range for a better competition among providers.

Competition between Wireless Service Providers Sharing a Radio Resource

“…Another possible extention is a more complete model partially inspired by [11] on investments in technologies and infrastructures, including our present assumption that market is segmented. This should yield investment of several providers on technologies with a shared spectrum, a result that was not possible in [11].…”

“…Remark that a similar model with possible resource (i.e., spectrum) sharing (but without demand segmentation and provider reputation) has been introduced in [11], including an additional level of game on network investment for providers which could implement several technologies. Though, in [11], no pricing game equilibrium could exist with providers both using a resource, in contradiction to what is observed in practice. We show here that thanks to demand segmentation and providers reputation, such an equilibrium can exist with an access resource shared by providers.…”

Competition in Private Commons: Price War or Market Sharing?

“…The works by Maille and Tuffin [25] and Maille et al [26] use a model where both the auction side and the service side of the competition are considered. The work in [25] specifically focuses on the competition between two different but substitute technologies while [26] models a three level competition, where spectrum owners, lessees and users each make their own separate decisions.…”

“…The work in [25] specifically focuses on the competition between two different but substitute technologies while [26] models a three level competition, where spectrum owners, lessees and users each make their own separate decisions. These decisions include the use of different technologies.…”

Competition in secondary spectrum markets: Price war or market sharing?

“…The works by Maille and Tuffin [24] and Maille et al [25] use a model where both the auction side and the service side of the competition are considered. The work in [24] specifically focuses on the competition between two different but substitute technologies while [25] models a three level competition, where spectrum owners, lessees and users each make their own separate decisions.…”