Abstract

TWDM PON is an emerging access architecture that is capable of offering different categories of services. For example, the operator can provide high-priced failure-proof services to the business users by deploying redundant elements in this network, along with low-priced unprotected service to the residential users. In this article, we analyze the economics of optical networks with a provision of such hybrid services. Specifically, we describe the operator as an economic entity that targets to maximize its earned profit by judiciously choosing the subscribers, the data rate price, the primary and redundant components that need to be deployed in the network to serve both business and residential users. The operator's profit maximization appears to be an MINLP (a mixed integer non-linear problem) that is hard to solve via polynomially complex algorithms. Interestingly, we show that, if users’ demand functions crossover at most finitely many points, one can develop an efficient algorithm to solve this optimization. For homogeneous user demand, we obtain a set of inequations that depicts economic viability of the optical network. Alongside, we also investigate how the system parameters impact different economic outcomes. Our model reveals several insightful results. For example, we exhibit that, by deploying optical fibers and leasing it to the operator at high prices, the government can earn a large revenue. However, this depreciates the number of served consumers. Similar trade-off is also observed between the user number and their welfare. Most part of our article considers a full protection scheme where the operator guarantees $\text{100}\%$ protection against service failures to the corporate users. Later we also extend our analysis to the case where the protection is guaranteed with a certain availability, $\alpha < 1$ . In this context, we show how the availability requirements of the corporate users affect the sustainability and economics of the network.

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