Servicing Inelasticity, Leasing Resources and Pricing in 5G Networks

We consider the problem for mobile network operators (MNOs) of leasing resources, servicing and pricing mobile users, in the context of 5G systems that facilitate the use of software-defined radio access network (SD-RAN) and network function virtualization (NFV) technologies. We study the case where the service capability of a MNO cannot satisfy the total users’ demand who are characterized by inelastic behavior against the servicing rate that they experience. The MNO addresses this temporal depletion of its resources and acquires dynamically, through leasing, additional resources from an infrastructure provider (InP) to adequately comply with its mobile users’ demand. We model and analyze the interactions among the MNO, and the users, as a Stackelberg game. To model users’ inelastic behavior, we use a sigmoid utility function. Furthermore, we show the optimal pricing decisions when MNO’s supplying capacity satisfies users’ demand. Given an excess on MNO’s supplying capacity, we employ the generalized r Lambert function to determine the optimal pricing. When MNO’s supplying capacity is not ample, we determine, besides pricing, an approximation of the optimal amount of the additional resources to purchase, given a leasing cost imposed by the InP. An interesting finding shows that the amount of additional resources to be purchased can be larger than the MNO’s minimum capacity gap. Simulation and testbed experimentation validate the feasibility of the proposed pricing and leasing scheme and demonstrate its practical application.