Can dynamic pricing make femto users and service providers happy?

Femtocell is a promising technology that will improve wireless resources efficiency through frequency spatial reuse however, its integration with the current cellular systems has been considered a fundamental challenge. In this study, we propose a mechanism by which the femto and macro capacity resources are jointly priced according to a dynamic pricing-based call admission mechanism. We study the performance of the proposed mechanism through a queuing theory approach. Several performance metrics such as the service provider´s revenue, call blocking and call deferral probabilities are determined, and the scheme is compared to a regular call admission control serving as a benchmark. The results show how much a joint dynamic pricing scheme can satisfy service providers in terms of increased revenue and congestion control, while keeping users satisfied in terms of their perceived quality of service. The proposed solution can be considered as a new charging model for a two-tier macro-femto network.