Correspondence: S K Samanta, Department of Computing and Electronic Systems, University of Essex, Colchester, UK. Tel: +44 7963 016593; Fax: +44 1206 872900; E-mails: sksamanta@bsnl.co.in, ssksam@essex.ac.uk

¹Swadesh Kumar Samanta is currently on study leave from Bharat Sanchar Nigam Ltd (BSNL), India's largest telecommunications company, where he has worked for 13 years. At BSNL he is responsible for the planning, commissioning and commercial deployment of GSM and CDMA mobile and DSL broadband networks in eastern India. In 2003, he was awarded a British Chevening Scholarship at the University of Essex, UK. Since January 2007, he has been researching telecommunication service pricing under the UK-India Education and Research Initiative (UKIERI) scholarship scheme.

²John Woods is a member of the Institute of Electrical and Electronics Engineers, Inc. (IEEE) and his interests include image processing, autonomous robots, intelligent power control, networks and network pricing. During his career he has accumulated over 60 journal and conference publications and been awarded grants in these areas. He is also a member of the IEE and regularly attends and presents at national and international conferences.

³Mohammed Ghanbari is a fellow of the Institute of Electrical and Electronics Engineers, Inc. (IEEE) (M'78-SM'97-F01) and is best known for a pioneering work on two-layer video coding for ATM networks, now known as SNR scalability in the standard video codecs, which earned him the Fellowship of IEEE in 2001. He has published more than 400 technical papers and three books on various aspects of video networking. His book, Video Coding: An Introduction to Standard Codecs, received the Rayleigh prize as the best book of year 2000 by the IEE. He is a fellow of IEEE, fellow of IET and charted Engineer (CEng).

Received 30 October 2007; Revised 30 October 2007; Published online 2 May 2008.

Abstract

This research demonstrates a technique to formulate price in mobile networks based on cost and demand, something that is not fully considered by operators who tend to be influenced by the market. We have analysed the impact of access and usage price on the subscription to a service. We show that a pricing strategy based on provisioning cost and (nonlinear) demand has potential to increase both the subscription and revenue to an operator. With real-world data from an Indian operator, we show that by applying our technique the revenue can be increased by 40 per cent, while also benefiting the customer.