An Economic Model of Subscriber Offloading Between Mobile Network Operators and WLAN Operators

With increasing mobile data demand there is a push towards heterogeneous networks. Small-scale operators (SSOs) of WLANs are becoming more prevalent, while Mobile Network Operators (MNOs) seek an outlet for their customers' data usage. These conditions prompt the need for an effective relationship between the two parties for the purpose of offloading cellular data traffic to WLANs in a way that is economically beneficial to all involved. This paper presents a model of such a relationship, in which the SSO sets a strategic offloading price per subscriber and the MNO chooses how many subscribers it wants to offload in order to minimize its costs. The application of this model is simulated in a real-world WLAN deployment in Oulu, Finland. Our findings can be used by both MNOs and SSOs to make informed network deployment decisions, even before engaging in an offloading relationship.