Exploring Time Flexibility in Wireless Data Plans

Abstract

Recently, the mobile network operators (MNOs) are exploring more time flexibility with the rollover data plan, which allows the unused data from the previous month to be used in the current month. Motivated by this industry trend, we propose a general framework for designing and optimizing the mobile data plan with time flexibility. Such a framework includes the traditional data plan, two existing rollover data plans, and a new credit data plan as special cases. Under this framework, we formulate a monopoly MNO's optimal data plan design as a three-stage Stackelberg game: In Stage I, the MNO decides the data mechanism; In Stage II, the MNO further decides the corresponding data cap, subscription fee, and the per-unit fee; Finally in Stage III, users make subscription decisions based on their own characteristics. Through backward induction, we analytically characterize the MNO's profit-maximizing data plan and the corresponding users' subscriptions. Furthermore, we conduct a market survey to estimate the distribution of users' two-dimensional characteristics, and evaluate the performance of different data mechanisms using the real data. We find that a more time-flexible data mechanism increases MNO's profit and users' payoffs, hence improves the social welfare.