Abstract
Rapidly increasing mobile data traffic have placed a significant burden on mobile Internet networks. Due to limited network capacity, a mobile network is congested when it handles too much data traffic simultaneously. In turn, some customers leave the network, which induces a revenue loss for the mobile service provider. To manage demand and maximize revenue, we propose a dynamic plan control method for the mobile service providers under connection-speed-restriction pricing. This method allows the mobile service provider to dynamically set the data plans’ availability for potential customers’ new subscriptions. With dynamic plan control, the service provider can adjust data network utilization and achieve high customer satisfaction and a low churn rate, which reflect high service supply chain performance. To find the optimal control policy, we transform the high-dimensional dynamic programming problem into an equivalent mixed integer linear programming problem. We find that dynamic plan control is an effective tool for managing demand and increasing revenue in the long term. Numerical evaluation with a large European mobile service provider further supports our conclusion. Furthermore, when network capacity or potential customers’ willingness to join the network changes, the dynamic plan control method generates robust revenue for the service provider.
Highlights
Mobile data traffic have exploded with the wide popularity of mobile Internet service and the exponential growth of mobile applications
There are multiple reasons that lead to customer dissatisfaction, but we model only the two most important reasons, namely network congestion (NC) and individual speed restriction (ISR)
Note again that dynamic plan control (DPC) enables the service provider (SP) to balance the benefit of earning more revenue in the short term and the cost of network congestion due to too much data traffic
Summary
Mobile data traffic have exploded with the wide popularity of mobile Internet service and the exponential growth of mobile applications. According to the Cisco Visual Networking Index released in February 2019 [1], global mobile data traffic have grown 17-fold from 2012 to 2017 and will continue growing at a compound annual growth rate (CAGR) of 46% from 2017 to 2022, reaching 77.5 exabytes per month by 2022. To handle rapidly increasing data traffic, new technology for wireless communications is needed. The second-generation of wireless telecommunications technology (2G) appeared ten years before the third-generation (3G), followed by the fourth-generation (4G) eight years later. The fifth-generation of wireless telecommunications was developed fast, but it still took six years to launch 5G [2]. According to the technology characteristics, the capacity of the mobile network is fixed during the same generation of wireless telecommunications
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