Duopoly Competition Between Small Cell Operators with Large Scale Deployments

Abstract

Recent trends in wireless networking such as small cells and network function virtualization, strongly suggest that the future cellular network will consist of many sub-networks controlled by self-interest operators competing for a share of the revenues associated with the high demand for service. This paper attempts to analyze the future network performance under these new market conditions, considering not only engineering properties of the sub-networks, i.e., achievable rate, but economic properties as well, i.e., service pricing. Using a game-theoretic approach, a characterization of the conditions where duopoly is established between two competing operators is provided, taking into account differences in deployment density as well as random placement of their respective small cell networks. Analysis shows that extreme infrastructure densification, even though desirable from a purely engineering perspective, may not lead to stable market conditions under the considered competition model.