Optimal pricing for multiple services in telecommunications networks offering quality-of-service guarantees

• Published in: IEEE/ACM transactions on networking Vol. 11; no. 1; pp. 66 - 80
• Main Authors: Keon, N.J., Anandalingam, G.
• Format: Journal Article
• Language: English
• Published: New York IEEE 01-02-2003; The Institute of Electrical and Electronics Engineers, Inc. (IEEE)
• Subjects: Bandwidth; Channel allocation; Communication networks; Communications networks; Economies of scale; Intelligent networks; Mathematical model; Pricing; Quality of service; Resource management; Telecommunication traffic
• ISSN: 1063-6692; 1558-2566
• DOI: 10.1109/TNET.2002.808409

We consider pricing for multiple services offered over a single telecommunications network. Each service has quality-of-service (QoS) requirements that are guaranteed to users. Service classes may be defined by the type of service, such as voice, video, or data, as well as the origin and destination of the connection provided to the user. We formulate the optimal pricing problem as a nonlinear integer expected revenue optimization problem. We simultaneously solve for prices and the resource allocations necessary to provide connections with guaranteed QoS. We derive optimality conditions and a solution method for this class of problems, and apply to a realistic model of a multiservice communications network.