The Impact of Unlicensed Access on Small-Cell Resource Allocation

Small-cells in licensed spectrum and unlicensed access via Wi-Fi are two commonly used options to reduce the demand for conventional macro-cellular networks and to provide expanded wireless services to low mobility users. The mix of these technologies depends on both the decisions made by wireless service providers (SPs) that seek to maximize revenue, and the allocation of licensed and unlicensed spectrum by regulators. In this paper, we study these interactions and consider heterogeneous cellular networks together with unlicensed access. Both a single monopoly SP and multiple competing SPs are investigated. The SPs split any available licensed spectrum into two separate bands for macro- and small-cells, which are then used to serve two types of users: mobile and fixed. Mobile users must be served by macro-cells only, whereas fixed users can be served by either macro- or small-cells, or alternatively by unlicensed access service. While the providers charge a (different) price per unit rate for licensed access services (macro- or small-cell), unlicensed access is free. We formulate a sequential game in which the users choose a service that yields the highest payoff, and the providers allocate bandwidth across macro-/small-cells. In general, the competition from unlicensed access results in inefficient (albeit unique) market equilibria, and in many cases all or some SPs allocate no resources to small-cell deployment. We conclude by showing how our framework can also be used to optimize the fraction of unlicensed spectrum when new bandwidth becomes available.