Mobility

Price War in Heterogeneous Wireless Networks

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Executive Summary

Wireless users have the opportunity to choose between heterogeneous access modes, such as 3G, WiFi or WiMAX for instance, which operate with different distance ranges. Due to the increasing commercial interest in access networks, those technologies are often managed by competing providers. The goal of this paper is to study the price war occurring in the case of two providers, with one provider operating in a sub-area of the other. A typical example is that of a WiFi operator against a WiMAX one, WiFi being operated in the smaller area. Using a simple model, the authors discuss how, for fixed prices, (elastic) demand is split among providers, and then characterize the Nash equilibria for the price war.

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