Wireless Service Providers Pricing Game in Presence of Possible Sponsored Data

Abstract

Sponsored data, where content providers have the possibility to pay wireless providers for the data consumed by customers and therefore to exclude it from the data cap, is getting widespread in many countries, but is forbidden in others for concerns of infringing the network neutrality principles. We present in this paper a game-theoretic model analyzing the consequences of sponsored data in presence of competing wireless providers, where sponsoring decided by the content provider can be different at each provider. We also discuss the impact on the proportion of advertising on the displayed content. We show that, surprisingly, the possibility of sponsored data may actually reduce the benefits of content providers and on the other hand increase the revenue of ISPs in competition, with a very limited impact on user welfare.