Economics of WiFi Offloading: Trading Delay for Cellular Capacity

Cellular networks are facing severe traffic overloads due to the proliferation of smart handheld devices and traffic-hungry applications. A cost-effective and practical solution is to offload cellular data through WiFi. Recent theoretical and experimental studies show that a scheme, referred to as delayed WiFi offloading, can significantly save the cellular capacity by delaying users' data and exploiting mobility and thus increasing chance of meeting WiFi APs (Access Points). Despite a huge potential of WiFi offloading in alleviating mobile data explosion, its success largely depends on the economic incentives provided to users and operators to deploy and use delayed offloading. In this paper, we study how much economic benefits can be generated due to delayed WiFi offloading, by modeling a market based on a two-stage sequential game between a monopoly provider and users. We also provide extensive numerical results computed using a set of parameters from the real traces and Cisco's projection of traffic statistics in year 2015. In both analytical and numerical results, we model a variety of practical scenarios and control knobs in terms of traffic demand and willingness to pay of users, spatio-temporal dependence of pricing and traffic, and diverse pricing and delay tolerance. We demonstrate that delayed WiFi offloading has considerable economic benefits, where the increase ranges from 21% to 152% in the provider's revenue, and from 73% to 319% in the users' surplus, compared to on-the-spot WiFi offloading.