Optimized static pricing approach for revenue maximization in telecommunications

In this paper a new time dependent pricing scheme is proposed for revenue management in mobile calls. The proposed scheme considers many essential parameters that affect pricing such as time-of-day seasonality, weekday/weekend seasonality and price demand elasticity for call arrivals and call duration. In this model, each day is partitioned into a number of periods; each period has a price according to the amount of its seasonal traffic. The periods´ boundaries as well as the prices for each period are optimized to maximize the revenue, hence obtaining a closed-form formula for the optimal prices. The proposed approach is simple to implement and operate, encourages the customer demand, and creates simple and predictable fees for customers. The proposed model effectively increases the revenue for real phone calls data and when compared with flat-rate pricing, where a constant price is used, it provides about 5% gain in revenue.