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

Abstract

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 thesis presents a model of such a relationship, in which the SSO sets a strategic offloading price per subscriber and several MNOs can choose how many subscribers they want to offload in order to minimize their costs. We determine the optimal offloading price, identify how the SSO incorporates its own network's quality of service (QoS) into its price decision, and examine the way in which the MNOs' cost structures affect their ability to offload. This model can be applied by both MNOs and SSOs to make informed network deployment decisions, even before engaging in an offloading relationship.