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Overcoming economic challenges of internet operators in low income regions through a delay tolerant architecture with mechanic backhauls

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  • Luis Marentes
  • Tilman Wolf
  • Anna Nagurney
  • Yezid Donoso
  • Harold Castro

Abstract

Regions with low population densities and low income, which may be rural, are far behind in Internet access as compared to their urban counterparts. Economically unsustainable deployments have been suggested as one of the factors with a high negative impact. Researchers using the Delay Tolerant Network Architecture (DTN) have established a less expensive alternative, but they do not provide guidelines as to how to price the new possible services nor any indication as to operators’ profitability. Resolutions of these two issues are the contributions of this paper. Based on a continuous pricing model, we explore how far the use of this technology may help in attaining profitable deployments with real and delay tolerant services. Our findings indicate that it is possible to support the investment in most of the scenarios built over data of a Sub-Saharan deployment, and for those not supported 79 % of the investment is predicted to be covered by gross profits. We hypothesize that the remaining value is affordable if service differentiation is enabled by means of a complementary architecture. Three components to test the hypothesis are introduced: (1) the pricing elements to form service level agreements, (2) a general overview of the architecture requirements, and (3) a novel pricing model. In this regard, our results show a positive effect of service differentiation which improves profits by 32 %. Copyright Springer Science+Business Media New York 2014

Suggested Citation

  • Luis Marentes & Tilman Wolf & Anna Nagurney & Yezid Donoso & Harold Castro, 2014. "Overcoming economic challenges of internet operators in low income regions through a delay tolerant architecture with mechanic backhauls," Netnomics, Springer, vol. 15(3), pages 183-213, November.
    • Handle: RePEc:kap:netnom:v:15:y:2014:i:3:p:183-213
    DOI: 10.1007/s11066-015-9091-x
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    References listed on IDEAS

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    1. Michalakelis, Christos & Varoutas, Dimitris & Sphicopoulos, Thomas, 0. "Diffusion models of mobile telephony in Greece," Telecommunications Policy, Elsevier, vol. 32(3-4), pages 234-245, April.
    2. Gulati, Girish J. & Yates, David J., 2012. "Different paths to universal access: The impact of policy and regulation on broadband diffusion in the developed and developing worlds," Telecommunications Policy, Elsevier, vol. 36(9), pages 749-761.
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    4. LaRose, Robert & Gregg, Jennifer L. & Strover, Sharon & Straubhaar, Joseph & Carpenter, Serena, 0. "Closing the rural broadband gap: Promoting adoption of the Internet in rural America," Telecommunications Policy, Elsevier, vol. 31(6-7), pages 359-373, July.
    5. Jean Tirole, 1988. "The Theory of Industrial Organization," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262200716, December.
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    Cited by:

    1. Luis Andres Marentes & Sergio Cabrales & Tilman Wolf & Anna Nagurney & Yezid Donoso, 2021. "A bandwidth auction mechanism to enable affordable internet access," Netnomics, Springer, vol. 22(2), pages 283-316, December.
    2. Nagurney, Anna & Yu, Min & Floden, Jonas & Nagurney, Ladimer S., 2014. "Supply chain network competition in time-sensitive markets," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 70(C), pages 112-127.
    3. Luis Andres Marentes & Sergio Cabrales & Tilman Wolf & Anna Nagurney & Yezid Donoso, 2022. "A bandwidth auction mechanism to enable affordable internet access," Netnomics, Springer, vol. 22(2), pages 283-316, October.

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