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Last call for the buffet: economics of cellular networks

Jeremy Blackburn, Rade Stanojevic, Vijay Erramilli, Adriana Iamnitchi, Konstantina Papagiannaki

Last call for the buffet: economics of cellular networks

ACM, Proceedings of the 19th annual international conference on Mobile computing & networking, September 2013



Voice and data traffic growth over the last several years has become a major challenge for cellular operators with a direct impact on revenues, infrastructure investments, and end-user performance. The economics of these operators depend on various incentives used to attract users in the form of unlimited, buffet-like voice/sms/data packages. However, our understanding of the effects of user behavior under these offerings on operator revenues/costs remains poor. Using two years of detailed usage information of 1 million users across three services, voice, sms and data, combined with payment and cost information, we study how user behavior affects the economics of cellular operators. We discover that around 20% of the users consume more resources than what they pay for and hence are non-profitable. In addition to the individual user behavior, we study how the user interactions in the call graph affect the operator’s revenues and cost, drawing on tools from social network analysis. We develop a framework that incorporates both the individual and social user behavior for studying how volume caps influence the revenues and the traffic costs. Using this framework we empirically show that volume caps can increase the difference between the revenues and the traffic costs of the studied operator by a factor of 2, while affecting only 16% of the existing user base. 

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