Incentives for infrastructure deployment by over-the-top service providers in a mobile network: A cooperative game theory model

Abstract

The success of smartphones has encouraged over-the-top service providers to seek ways in which they can have more control over the wireless service offered to their users. Google Project Fi is an example for this type of action, where control over the wireless service is achieved by either deploying own wireless infrastructure or entering into service level agreements with mobile network operators. Following this example, we construct a game theoretic model for the interaction between mobile network operators and over-the-top service providers and assess how the spatial distribution of mobile demand impacts the outcomes of cooperation, unevenly affecting the utilities achieved by the two parties. We also show how the cost of fixed infrastructure deployed by the mobile operator, if too high, may render cooperation between the two parties ineffective.