INVESTIGATING THE EFFECTS OF SUBSIDY ON NETWORK RESOURCE UTILIZATION IN MULTI-TIER COMMUNITIES

One of the main aims of telecommunication subsidies in developing countries is to extend information and communication services to the information "have nots" through subsidized communication services. However, subsidies may have an impact on network resource utilization, Quality of Service (QoS) and the number of users subscribing to an Internet Service Provider (ISP). For example, subsidies may lead to low QoS and high resource utilization while in some instances unsubsidized services may lead to high QoS and low utilization of resources. This see-saw effect may eventually lead to market failure and it may, now and then, destroy market efficiency. Thus far, this phenomenon calls for a combined study, in which the relationship between subsidy, price, QoS and resource utilization is investigated. In this paper, the impact of subsidies on QoS and resource utilization in multi-tier communities is investigated. We try to find a middle ground between implementation of a subsidy discount rate policy for socio-economic development and its effects on QoS and resource utilization in a network.