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.