Subscription dynamics and competition in communications markets

Abstract

Multiple technologies, possibly administered by different entities, are expected to coexist in the rapidly-expanding communications market. In order to understand the complex interactions between different technologies, it is of fundamental importance to understand how technologies affect the demand of users and competition between network service providers (NSPs). To this end, we analyze user subscription dynamics and competition between NSPs in a duopoly communications market. First, we investigate the impact of technologies on the users' dynamic subscription and show that, for any charged prices, the equilibrium point of the considered user subscription dynamics exists and is unique. Next, we derive a sufficient condition on the technologies of the NSPs that ensures the user subscription dynamics to reach the equilibrium point. Then, we model the NSP competition using a non-cooperative game, in which the two NSPs choose their market shares independently, and provide a sufficient condition that guarantees the existence of at least one pure Nash equilibrium in the market competition game.