Correspondence: Saravut Yaipairoj and Fotios Harmantzis, Telecommunications Management, School of Technology Management, Stevens Institute of Technology, Castle Point on the Hudson, Hoboken, NJ 07030, USA Tel: +1 201 216 8978; Fax: +1 201 216 5385; E-mail: syaipair@stevens.edu or fharmant@stevens.edu

¹Saravut Yaipairoj holds a bachelor's degree in telecommunications engineering from King Mongkut Institute of Technology, Thailand and two Master's degrees (Computer Networking, Communication Engineering) from New Jersey Institute of Technology. He acquired practical experience in major telecommunications companies such as Lucent Technologies and Advanced Info Service Ltd (Thailand). Currently, he is pursuing a doctoral degree in Telecommunications Management at Stevens Institute of Technology under the supervision of Professor Fotios Harmantzis. His areas of research include network performance analysis and pricing of wireless networks.

²Fotios Harmantzis was born in Greece, where he completed his bachelor's and master's degrees in Computer Science at the University of Crete, in 1995 and 1997, respectively. He received the MSE degree from the University of Pennsylvania, Philadelphia, in 1998, focusing on applied mathematics. In September 1998, he joined the Communications Research Group at the University of Toronto, as a research fellow and instructor. He worked on stochastic modeling, pricing and simulation in computer networks, towards his PhD degree in Electrical and Computer Engineering (graduated in November 2002). During his academic studies, Dr Harmantzis held the Connaught Scholarship and the Ontario Graduate Scholarship at the University of Toronto, a Teaching Fellowship at the University of Pennsylvania and a Research Fellowship from the Foundation for Research and Technology-Hellas, for outstanding academic performance and research contributions. His research activities are in mathematics and economics of computer networks and systems, as well as in mathematics of finance and risk. His teaching interests include economics of networks, probability, stochastic processes and simulation modeling and analysis. Since September 2002, he is with the School of Technology Management, Stevens Institute of Technology, as an Assistant Professor, and Head of Performance and Economics of Telecommunication Networks research team.

Received 10 May 2006; Revised 10 May 2006.

Abstract

Network traffic in mobile networks has grown exponentially in recent years which lead to increasing congestion, especially in data services. A pricing network resource could help resolve congestion and potentially increase revenue. However, determining the suitable congestion prices that optimise both performance and revenue of the networks could be challenging. This paper presents an auction-based pricing model that is used as an admission control mechanism for mobile data services. The proposed modelling approach allows mobile operators to improve performance of mobile data services and optimise network revenue by adjusting the reserve prices of the revenue-maximising auction (optimal auction). The paper presents numerical and simulation results illustrating the impact of the auction reserve prices on both network performance and operator's revenue. The methodology for identifying the suitable auction reserve prices for our application is also investigated.