WiFi Offloading: What does it mean to an MVNO?
WiFi offloading enables mobile subscribers to utilize free WiFi hotspots to send and receive data.
For MVNOs that can mean reduced data revenues — but it also eases bandwidth demand to keep speeds up and subscribers happy. So what does it all mean?
First, a little history. The relatively recent and rapid proliferation of smart devices made the use of wireless networks instead of cellular service for data transmission a very real and viable option for mobile subscribers. Increased subscriber interest in a WiFi option caused an increased mobile network operator concern about potentially significant revenue losses. MNOs feared that if subscribers opted primarily for WiFi instead of cell service to access all their mobile apps and data, data plan revenue would take a hit, and with growing VoIP popularity even voice traffic could be at risk.
As a result, many MNOs worked hard to make WiFi a difficult-to-use option by disabling WiFi functionality on mobile devices or requesting that device manufacturers exclude WiFi radios in their devices altogether. MNOs pursuing this kind of restrictive WiFi strategy did so under the assumption that it would force subscribers to keep using cellular service and even cause them to upgrade to higher data rate plans, generating more revenue for the carrier.
What ended up happening was interesting. As data usage continued to grow in leaps and bounds, bandwidth availability tightened. MNOs were now faced with the substantial CAPEX expense of building out increased network capacity as speeds dropped and the subscriber experience become less-than-satisfying.
Some quick figuring revealed that it would be far less expensive to encourage subscribers to offload their data usage to WiFi networks instead of adding cellular network capacity even if the MNO did lose some top-line revenue.