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Spectrum sharing can be a win-win for operators and subscribers

By sharing resources, mobile phone service providers can reduce call drop rates and make higher profits, is the conclusion of a study by researchers from the Indian Institute of Science and the University of Pennsylvania, USA. The research, though conducted a few years ago, assumes importance now, because the Telecom Regulatory Authority of India (TRAI) recently allowed different service providers to share spectrum.

“Call drops” in cellular networks have become a national concern, with one or the other newspaper reporting about this problem almost on a daily basis, the Prime Minister exhorting national level scientists to find a solution to the problem,and the Minister for Telecom and Broadcasting urging the cellular operators to fix their deployment and network management issues or face call-drop related penalties. The call drop rate, 5% to 15% in some metros, is a far cry from the maximum allowed rate of 2%. Therefore, it is not uncommon for cellular subscribers, fed up with the poor quality of a voice call, to preempt (drop!) their conversation with the parting words “I will call you back from a landline!”

Mobile phone service providers have towers beaming signals all across the country. However, various factors, such as weak signals and subscriber overload, lead to poor quality of service to the customers. To address this issue, TRAI has allowed the service providers to pool their resources together to serve customers well. An example easily illustrates how this could help subscribers. A subscriber of operator A happens to be at a location where service from A is poor (either due to poor coverage or congestion in A’s part of the spectrum) whereas the service from operator B is good. If somehow B could serve this subscriber, it is certainly a “win” for the subscriber. The reverse situation could also occur, in which case B’s subscriber is better served by A. Thus, if the operators cooperate, the combined spectrum can be more efficiently utilized.  Resource pooling not only allows efficient usage of bandwidth, but also leads to reduced power consumption and lower call drop rates. If such resource pooling is permitted, and the revenue generated can be shared by operators A and B so that they actually make more revenue, then we have a “win-win” for the subscribers and the operators.

The researchers established this by using the theory of cooperative games. Game theory, extensively used in economics and computer science, is the use of mathematical models to study conflict and cooperation among rational decision makers. The researchers built mathematical models to study the different strategies the service providers could adopt while forming the coalition. They found that, if all the operators form a coalition, thereby pooling their resources and their subscribers, and sharing the total revenue, then all the operators will reap greater profits, while the users obtain better service. However, if a set of operators quit the coalition, then at least one of them is sure to do worse than if it remained in the coalition. Obviously, fair sharing of the aggregate payoffs has practical obstacles, e.g., the operators may not report their true expenditure and earnings. The research also shows that operator coalitions can be beneficial to all the players even if they do not share their earned payoffs.