Optimal pricing for broadband wireless Internet access service

This paper analyzes optimal pricing of two different platforms of broadband wireless access to the Internet when one provider uses 3G and the other uses WiFi using game theory. In this model, we assume an imaginary area in which two different providers compete with different service delivery platforms (3G vs. WiFi) and different network deployment strategies. They optimize their profit using different pricing in the same market. Several scenarios are made based on (I) population density (big city and small city), (2) user´s preference (bandwidth and coverage), (3) user´s willingness-to-pay, (4) the number of hot-spots, (5) cost structure of deployment, and (6) a market penetration rate. Through an equilibrium analysis, we demonstrate which provider has a better market position and what level of pricing is optimal in the future competitive environment.