On the economics of GPRS networks with Wi-Fi integration

Wi-Fi provides an appealing opportunity for GSM/GPRS operators to enhance their data capability. By integrating both networks, operators are able to provide 3G-like services. However, both networks have different data rates and capacity, which makes economics of the network integration and pricing of services a challenging issue. In this paper we introduce a novel pricing model for GPRS networks integrated with Wi-Fi networks. The model identifies how the integration can play a significant role in increasing operators’ overall revenue and potentially improve the performance of GPRS networks. We identify the optimal GPRS charging rate and Wi-Fi connection fee that yields maximum network revenue. In addition, we conduct a case study of a wireless operator that considers network integration, adopting our pricing model. The investment analysis provides the insightful information for profitable business cases of GPRS networks with Wi-Fi integration.