Analyzing the Integration of WiMAX and Wi-Fi Services: Bandwidth Sharing and Channel Collaboration

Several emerging studies have focused on the pricing issue of bandwidth sharing between Wi-Fi and WiMAX networks; however, most either concentrate on the design of collaborated protocols or figure out the issue without the overall consideration of consumer preferences and contract design. In this study, we explore a wireless service market in which there are two wireless service providers operating Wi-Fi and WiMAX. One of the research dimensions given in this study is whether wireless service providers implement bandwidth sharing, while the other is whether they make decisions individually or jointly. By involving consumer preferences and a wholesale price contract in the present model, we find that bandwidth sharing would benefit a WiMAX service provider, yet a Wi-Fi service provider would make no significant savings under a wholesale price contract. In addition, the profit of a WiMAX service provider may increase with Wi-Fi coverage when bandwidth sharing has been implemented but decrease with Wi-Fi coverage when both wireless services operate without bandwidth sharing. Furthermore, the WiMAX service provider allocates more capacity when the average usage rate increases, but lowers the expenditure of capacity when the average usage rate is too high.