On Pricing of 5G Services

IT and telco providers are preparing for the era of 5G; in terms of technology, the driving force is virtualization, both for computing and networking. The 5G services will be superior than today's online services not only in technological aspects, but also from an economic and business perspective: fast service creation, effective utilization of resources, dynamic adaption to actual demand are all direct benefits of the virtualized infrastructure. In this paper we study the economic interactions between 5G resource providers and customers: we formalize how resources should be priced and selected for being booked. In particular we show that usage-based pricing is an income-maximizing scheme for providers, and we derive the problem the customers need to solve for cost-optimizing service deployment.