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A resource pricing model for data networks

This paper presents a simple economic model for resource pricing in data networks. Though the model presented is simple, it is able to highlight various issues involved. The model is relevant for both networks that receive government subsidy, and also for those that have to generate all their revenue. The critical factor in calculating the tariff is correct estimation of subscriber demand. If projected demand is not near the real demand, it may cause shortfall in the revenue, and as a result, the network may not be able to provide satisfactory level of services if it continues to make losses.