Ecosystem, QoE and pricing of end to end differentiated services

End-to-End (E2E) differentiated services refer to content and application services delivered over Internet with differentiated grade of quality of service (QoS) involving multiple network and ecosystem actors. Such services represent a prospective way to assure QoS required by demanding customers, who cannot be satisfied with QoS delivered by the usual best effort Internet connectivity. This paper focuses on the service differentiation aspect. Using portfolio theory from finance, it develops an optimization model designed for selection of portfolio of such content and application services with varying degrees of QoS by risk adverse service provider under uncertainty about demand, generated by market of heterogeneous users. The model includes decisions about service offer, quality of services, pricing and network capacity expansion. QoS is here used as an objective measure of quality of experience (QoE) for services with E2E performance determining the user satisfaction degree. The risk/profit tradeoff is computed using the industry specific risk measure, which is the fraction of demand not satisfied under the required QoS. We present numerical analysis of the model and the results of the case study shows that introduction of E2E differentiated services can bring substantial benefits to ISP and demanding users, while preserving the quality of basic services.