Pricing policies for femtocell service adoption in two-tier cellular networks

Femtocell is a cost-effective solution to both soaring wireless data traffic and coverage hole problems. Along with technical issues, the economic benefit which Wireless Service Providers (WSPs) and mobile users get from the femtocell service is a key to successful adoption of femtocell technology. In this paper, we study pricing issues for femtocell service using game theoretic approach. We propose a realistic and detailed pricing framework, and model the interaction between a monopolist WSP and users by a leader-follower game. We also model the competition between two WSPs in a duopoly market at the adoption of femtocell service by a non-cooperative simultaneous game. The competition between femtocells and repeaters is also considered using the same pricing framework. Analysis results present important factors and pricing strategies for economic success of femtocell technology.