On Modeling the Effect of Peak-Load Pricing Mechanism to the Telecommunication Traffic

Wireless service providers often have to maximize their profit while satisfying the pre-specified Grade-of-Service (GoS). However, the uneven traffic demand over a day has adverse effect to the design - the high blocked call probability during the peak-load hour limits the possible number of admitted users while low traffic during the off-peak hour results in the inefficient use of radio spectrum. The aim of this paper is to study how a monopoly service provider can maximize the profit given that the daily traffic demands are time-varying. A possible way is to alter traffic demands through pricing differently at different periods of a day.