Wireless LAN access point deployment and pricing with location-based advertising

In order to improve the quality of service (QoS) for mobile users (MUs) and save investment cost for deploying new cellular base station, mobile network operators (MNOs) are deploying wireless local area network (LAN) access points (APs) to offload MU's traffic from cellular network to wireless LAN. However, offloading too much traffic from cellular network may impair MNO's profit since the cellular network price is higher than that of wireless LAN, whose price is low or even zero. Therefore, how to deploy wireless LAN APs to offload traffic without impairing MNO's profit is a critical problem for MNOs. As far as the authors understand, existing studies about deployment of wireless LAN APs do not consider MNO's profit and are usually in a heuristic manner. In this paper, we study the location-based advertising (LBA) leveraged wireless LAN deployment, where MNO may also collect revenue by selling LBA service in different locations to advertisers. We formulate MNO's profit maximization problem by considering different MU's demand in different locations, wireless LAN price for MUs, and revenue from LBA service. Extensive simulations are conducted to validate our analytical results.