Analyzing Dynamics of MVNO Market Using Evolutionary Game

Abstract

In many countries, mobile virtual network operators (MVNOs) provide mobile network services to users by leasing the wireless bandwidth from mobile network operators (MNOs). To attract many users and increase the number of subscribers, some MVNOs introduce the strategy called zero rating (ZR) which exempts traffic of specific content providers (CPs) from usage-based charging. The ZR differentiates traffic of specific CPs from that of other CPs, so the ZR violates the principle of network neutrality, and the ZR is prohibited in some countries. However, to clarify the desirable rules against the ZR, we need to analyze its impact on end users. In this paper, we investigate the charging strategy of ZR MVNOs by analyzing the price plans of major MVNOs in Japan. Moreover, we model the dynamics of the MVNO market consisting of low-price (LP) MVNOs and ZR MVNOs by the evolutionary game which can model the dynamics of social environment described by strategic distribution. We show that the MVNO market will be monopolized by MVNOs using either strategy, and the monthly fee of users will increase at the steady state. Therefore, we conclude that ZR MVNOs are required to introduce a service plan for users who do not benefit from the ZR.