Complementary Investment of Infrastructure and Service Providers in Wireless Network Virtualization

Abstract

Wireless network virtualization has emerged as a promising technology to provide a variety of services and applications for future wireless network as by enabling a more effective exploitation of network resources. In a mobile virtual network (MVN), both infrastructure provider (InP) and service provider (SP) must have a complementary relationship, as their revenues are mutually dependent. The trading of resources and services between the InP and SP is usually a long-term supply contract, and details of trades are left to be specified in the future. Thus, the returns of the InP and SP depend on their bargaining positions, ex post, and investments, ex ante. As a result, the InP and SP may hesitate to have specific investment, since it may put them at a risk of no return. In this paper, the problems of determining how the ownership of the resources affect the InP and SP's incentives to invest and how to choose the most efficient investments in an MVN are studied. First, a general system model is developed in multiple InPs and SPs engaged in a complementary relationship to exchange multiple physical and virtual resources. Subsequently, for this formulated problem, the optimal investments are derived. Furthermore, we give detailed analysis of a special case and shed light on the problem of ownership and investment efficiency by answering the question on whether the ownership of resources should be integrated or operated separately by the SP and InP. Simulation results assess the parameters that affect the efficiency of investment through simulations.