Time and location aware mobile data pricing

Mobile users´ social behaviors often lead to significant temporal and spatial variations of mobile traffic. This could create severe cellular network congestion in peak hours and hot spots. This paper presents an initial study on designing the time and location aware pricing scheme to incentivize users to smooth traffic and reduce network congestion. We derive the optimal pricing scheme through analyzing a two-stage decision process, where the operator announces the time and location aware prices in Stage I, and users schedule their mobile traffic accordingly in Stage II. We can translate such a two-stage decision problem into a bilevel optimization problem, which is NP-hard and challenging to solve. We propose an easily implementable algorithm, which utilizes a penalty method and a block coordinate decent algorithm to solve the problem. The resultant pricing scheme ensures a win-win situation for both the operator and users. Our simulation shows that the operator can reduce the extra cost for provisioning the peak traffic by up to 98.70%, and users can increase their total payoff by up to 106.10%, comparing with a time and location independent pricing benchmark.