Offering Supplementary Network Technologies: Adoption Behavior and Offloading Benefits


To alleviate the congestion caused by fast growth in demand for mobile data, wireless service suppliers (WSPs) have begun encouraging users to offload a number of their traffic onto supplementary network technologies, e.g., offloading from 3G or 4G to WiFi or femtocells. With the growing popularity of such offerings, a deeper understanding of the underlying economic principles and their impact on technology adoption is critical. To the present end, we have a tendency to develop a model for user adoption of a base technology (e.g., 3G) and a bundle of the bottom plus a supplementary technology (e.g., 3G + WiFi). Users individually make their adoption decisions based on several factors, including the technologies' intrinsic qualities, negative congestion externalities from other subscribers, and the flat access rates that a WSP charges. We tend to then show how these user-level decisions translate into mixture adoption dynamics and prove that these converge to a distinctive equilibrium for a given set of exogenously determined system parameters. We have a tendency to absolutely characterize these equilibria and study adoption behaviors of interest to a WSP. We tend to then derive analytical expressions for the revenue-maximizing costs and optimal coverage issue for the supplementary technology and examine some resulting nonintuitive user adoption behaviors. Finally, we have a tendency to develop a mobile app to gather empirical 3G/WiFi usage data and numerically investigate the profit-maximizing adoption levels when a WSP accounts for its cost of deploying the supplemental technology and savings from offloading traffic onto this technology.

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