Offload: not what you may think it is

People view Aptilo as a leader in Wi-Fi Offload, but we have always thought offloading is a somewhat misleading term. Because offload is not always what you may think. At least not in the industrial world spoiled by good quality 4G networks.

7 million mobile subscriber operator share Wi-Fi Offload

WI-FI OFFLOAD IS NOT ONLY ABOUT OFFLOADING VOLUMES OF DATA!

Let us share one example. One of our operator customers, offering both mobile and fixed data services, has had an explosion of data traffic since the “iPhone Era” began. The total yearly data usage of mobile data and Wi-Fi for this operator with 7 million mobile subscribers has gone from 28,000 TB in 2011 to 216,000 TB in 2016 (numbers for 2017 haven’t arrived yet). They have deployed more than 15,000 Wi-Fi access points at 3,500+ strategic locations.

The interesting thing is that during this explosion of data usage, the share of Wi-Fi traffic has constantly been around 4-5%. At the same time, the share of mobile subscribers using Wi-Fi every month increased to 62%, thanks to Aptilo’s automatic SIM authentication introduced in 2011.

Although we have seen many customers with offload share up to 30%, the 4-5% figure is quite normal for an operator with a good LTE network deployed over a vast geographic area.

ONLY 4% OFFLOAD: IS IT WORTH IT?

This is a valid question to ask. If you can only offload 4% of the data, is Wi-Fi offload worth it from a cost-saving perspective? Before we carry on with the main point of this article, let’s conclude: yes it is! It’s a game of volumes. For this operator, the traffic offloaded to Wi-Fi in 2016 was 9,072 TB (4.2% of 216,000 TB). This is an enormous amount of data, equal to watching Netflix HD (1080p) around the clock for 518 years. Since the cost to deliver data in Wi-Fi is anything between 35-65% of the cost of delivering the same amount of data in LTE, there are significant cost savings to make in the data production alone. So, you can never go wrong investing in Wi-Fi.

However, as with most mobile operators, it is too sensitive of an internal subject to discuss the cost savings associated with Wi-Fi. So, this operator does no such calculations officially. However, it is estimated that they save around 4.5 MEUR yearly on delivering these 9,072 TB through Wi-Fi instead of LTE. In this calculation we have assumed the average cost of delivering data through the LTE macro network. Since it is mostly indoor locations with difficulties when it comes to coverage, the real cost would be much higher. In fact, some locations would be more or less impossible to cover through the LTE macro network.

The 4.5 MEUR per year is not a huge amount for a big operator, but they only see these cost savings as “the cherry on the top.”

IT’S ALL ABOUT DELIVERING AN EXCELLENT USER EXPERIENCE

This operator offloads 4% of the traffic. But, 62% of their subscribers enjoy Wi-Fi every month. So, Wi-Fi offload is all about bringing a great user experience to high-density locations (especially indoors). This is where operator-managed guest Wi-Fi (B2B) with additional operator SSIDs comes in.

THIS IS WHERE THE REAL MONEY IS

The big money in Wi-Fi offload does not come from cost savings. This is what the operator calculates their Return on Investment (ROI) from:

HIGHER CUSTOMER ACQUISITION
It’s not only the 4.3 million (62% of 7 million) people using the operator’s Wi-Fi service every month. In addition there are 450,000 non-subscribers, or should we say potential customers, connecting to the service through a captive portal. The Wi-Fi service has turned out to be an excellent way to gain additional mobile customers.
REDUCED CHURN
Their Wi-Fi service also makes subscribers more “sticky”, they have the lowest churn-rate in their region. Another example on this is Shaw in Canada reporting a 35% lower churn rate among customers that use their Wi-Fi service.
BUSINESS-TO-BUSINESS SERVICES
Selling managed guest Wi-Fi services to businesses and venues (B2B) is a great source of income for this mobile operator, but it also gives them an opportunity to sell other products and services. When you sell internet capacity and mobility, you get to talk with the IT department. When you sell guest Wi-Fi services with a good end-user engagement and analytics tools, you get to talk with the commercial side and the management. This operator states that they have won many valuable B2B deals thanks to their managed guest Wi-Fi services.