Offloading traffic to Wi-Fi networks is now becoming an attractive way of alleviating congestion and extending coverage without the need for significant additional investments for increased mobile network coverage and capacity. While Wi-Fi offloading technology standards are maturing and various vendor solutions being adopted by operators in developed economies, the offloading business models need to be reevaluated for Africa where the Wi-Fi adoption patterns and regulations are a rather different. In this study, we aim to analyze the Wi-Fi offloading business model for the African market context in a holistic manner by identifying plausible offloading scenarios, noting the critical success factors (or barriers) and evaluating the emerging value network configurations. Finally, we present an exemplary business model for an Offloading Service Provider based on an existing offloading vendor solution and using the STOF model as the theoretical framework.

1. Development of the Wi-Fi Offloading Business
Concept within the African Market Context
Beneyam B. Haile, Edward Mutafungwa, and Henna
Warma
Department of Communications and Networking
Aalto University, COMNET
Espoo, Finland
{beneyam.haile, edward.mutafungwa,
henna.warma}@aalto.fi
Abstract—Offloading traffic to Wi-Fi networks is now becoming
an attractive way of alleviating congestion and extending
coverage without the need for significant additional investments
for increased mobile network coverage and capacity. While Wi-
Fi offloading technology standards are maturing and various
vendor solutions being adopted by operators in developed
economies, the offloading business models need to be re-
evaluated for Africa where the Wi-Fi adoption patterns and
regulations are a rather different. In this study, we aim to
analyze the Wi-Fi offloading business model for the African
market context in a holistic manner by identifying plausible
offloading scenarios, noting the critical success factors (or
barriers) and evaluating the emerging value network
configurations. Finally, we present an exemplary business model
for an Offloading Service Provider based on an existing
offloading vendor solution and using the STOF model as the
theoretical framework.
Keywords-Wi-Fi Offloading; Value Networks; Business
Models
I. INTRODUCTION
Mobile networks are now enabling Internet access for
millions of previously unconnected users in most emerging
markets of Africa [1, 2]. Various indicators provide empirical
evidence that clearly suggest very rapid mobile Internet
growth trends, both in terms of unique user numbers and
traffic generated. For instance, Ethiopia has seen a significant
growth in mobile subscription with a penetration of 8.15% in
2010; and there is a forecast of huge increment such that the
government has planned itself for 50% penetration in 2015
[3]. The mobile web statistics provided by Opera Software (a
mobile browser maker) notes that the number of web page-
views and data transferred on mobile handsets in Tanzania
grew by 335% and 288%, respectively, in the one year period
from December 2009 to December 2010 [4]. Furthermore,
statistics from Kenya’s regulator also note that the Internet
penetration increased from 10% in September 2009 to 22% in
September 2010, with mobile Internet access accounting for
99% of the total Internet subscriptions for that period [5].
Cisco has also recently made a forecast that Africa and Middle
East will have the strongest mobile data traffic growth than
any other region [6].
However, the sustainability of such rapid mobile Internet
users and traffic volume growth trends is becoming more of a
challenge for mobile operators in Africa, as it demands denser
base station deployments to provide additional capacity and
coverage. This challenge is attributed to the fact that each new
cell site contributes to operator’s capital and operating
expenditures [7], costs which are further exacerbated by
factors, such as, lack of reliable power supply from the grid.
Furthermore, following the initial wave of early adaptors of
mobile Internet services, the majority of the next wave of new
subscribers in Africa will be from the bottom half of the
economic pyramid. This will result in reductions in the
average revenue per user (ARPU) that operator can expect
from their expanding subscriber base. Alternatively, mobile
network upgrades to emerging high-capacity 4G radio access
technologies, such as, Long Term Evolution (LTE), is an
attractive option, but can only be considered as a long-term
solution due to lack of affordable user devices and strategy by
operators to first recover their 3G network investments [8].
Therefore, mobile operators are always looking for ways to
alleviate the capacity crunch problem without having to
always resort to costly deployments or upgrades to the radio
access and core networks. To that end, operators have multiple
strategies (e.g. data compression [9], tiered or usage-based
pricing [10], etc.) to alleviate the capacity crunch problem. Of
the strategies considered, offloading is increasingly being
viewed as one of the most effective approaches [10]. In the
context of this paper, offloading is considered as transferring
traffics from a congested 2G, 3G, or 4G cellular mobile
networks to another network.
Currently, mobile offloading can be achieved using two
possible mechanisms, that is, offloading traffic from macro to
3G or 4G femtocells [11], or alternatively offloading to IEEE
802.11x Wi-Fi networks 1
via Wi-Fi access points
[12],[13],[14],[15]. Femtocells are gaining considerable
interest as a means to alleviate indoor coverage and capacity
problems associated with legacy macrocellular mobile
networks; however they are yet to achieve mass adoption due
1
Wi-Fi network also referred to as Wireless Local Area Network
(WLAN). In this paper, the terms Wi-Fi and WLAN will be used
interchangeably.

2. to need for standards to mature and femto-macro interference
issues to be addressed comprehensively [16]. By contrast, Wi-
Fi has had considerable success in terms of user adoption due
to operation in 2.4 GHz and 5 GHz unlicensed bands and
economies of scale, which have made Wi-Fi products
relatively affordable [17].
The success of Wi-Fi is also reflected in current industry
choice offloading mechanisms, with Wi-Fi offloading being
the current market leader in developed economies. To that
end, the analysis of the opportunity presented by Wi-Fi
offloading in emerging markets of Africa is both timely and
issue. The objective of this study is to contribute to increased
understanding of the Wi-Fi offloading business within the
context of African emerging markets. Specifically, we analyze
the potential offloading services and clarify the evolution
paths for the Wi-Fi offloading market. First, we carry out a
scenario analysis on how the Wi-Fi offloading can be provided
to the mobile data users and evaluate the alternative value
networks which could enable offloading services in the future.
In addition, we present a potential business model for a new
stakeholder who could start providing offloading services for
the mobile operators. The rest of the paper is structured as
follows. In Section II, the state of the art in Wi-Fi offloading
technologies is presented and Section III discusses the
offloading market analysis. Section IV presents an exemplary
business model while Section V provides the conclusions of
the study.
II. TECHNOLOGY OVERVIEW
Wi-Fi offloading can be implemented using a number of
different approaches, based on legacy or novel technologies.
The most common and simplest approach is to utilize the user-
controlled connection manager feature that is included in the
operating systems of most Wi-Fi-enabled mobile. The
device’s connection manager enables the end-users to
seamlessly or manually connect (or disconnect) data
connections from Wi-Fi networks, depending on device
settings and stored configurations. Alternatively, there are a
number of standardized and proprietary Wi-Fi offloading
technologies that provide advanced carrier-grade features,
such as, offloading control functionality for the mobile
operator.
The Third Generation Partnership Project (3GPP) has
specified three different technologies that enable offloading
from 3GPP standardized mobile data networks (Global System
for Mobile Communications (GSM)/ General packet radio
service (GPRS), Wideband Code Division Multiple Access
(WCDMA), High Speed Packet Access (HSPA) etc.) to Wi-Fi
for multimode terminals (with both 3GPP and Wi-Fi
interfaces). These technologies are described briefly below.
i. Generic Access Network (GAN) which is also referred
to as Unlicensed Mobile Access (UMA), whereby a
GAN Controller (GANC) is deployed in a mobile core
network (emulating an Radio Network Controller) to
enable 3GPP-WLAN vertical handovers for UMA-
enabled terminals [12].
ii. Inter-working Wireless LAN (I-WLAN) which
specifies interfaces for common control mechanisms
(e.g. authentication) for 3GPP and WLAN inter-
working, and the Packet Data Gateway (PDG) to
provide gateway functionality for WLAN access
towards the 3GPP core network [13].
iii. Access Network Discovery and Selection Function
(ANDSF), an entity within the 3GPP Evolved Packet
Core (EPC) which provides means for the mobile
operator to define policies which dictate how ANDSF-
enabled terminals could connect to non-3GPP access
(WLAN, Worldwide Interoperability for Microwave
Access (WIMAX), etc.)[14].
The Third Generation Partnership Project 2 (3GPP2) has
also standardized CDMA 2000 networks and WLAN inter-
working, where Packet Data Interworking Function (PDIF) is
included as a security gateway so that the operator network
will be guarded against unauthorized access and inbounds
threats [18]. This inter-working is very important in a country
like Ethiopia where almost 90% the country is covered by
CDMA network [3].
Various vendors (Kineto Wireless, Greenpacket, WeFi
etc.) have ventured into the offloading market with proprietary
Wi-Fi offloading solutions based on customized versions of
the aforementioned standardized technologies. Typically,
these solutions are proprietary based on their client
applications which provide implementations of the respective
standards within the terminal devices. Furthermore, the market
also includes fully proprietary technologies that fall outside
the scope of the aforementioned standardized offloading
technologies. This includes the Wi-Fi offloading solution from
Notava [15], which will be presented in more detail in the
exemplary offloading business model of Section IV.
III. WI-FI OFFLOADING MARKET ANALYSIS
This Section analyzes Wi-Fi offloading within the context
of the African market. To that end, a scenario analysis for
adoption of Wi-Fi offloading is carried out and alternative
value-network configurations are evaluated.
A. Scenario Analysis
In order to clarify the big picture and the possible evolution
of the offloading market, we construct scenarios to address the
question on how Wi-Fi offloading could be provided for end
users in the African market context. Scenario analysis
methodology previously proposed by Schoemaker [19], has
recently gained popularity as a tool for managing the
uncertainty, complexity and disruptiveness of new
technologies, such as, broadband local wireless access [20].

3. Several offloading solutions exist in the market as noted
previously in Section II, each employing differing mechanisms
from the perspective of the end-users and the mobile operators.
Following some carefully targeted literature and market survey,
as well as expert interviews, we identified some notable macro-
environmental trends that influence the Wi-Fi offloading
market, particularly in the African-context. These trends were
then compiled using a PEST (Political, Economical, Social and
Technological) analysis, with the findings being summarized in
Fig. 1.
Figure 1. Key macro-environmental trends in Wi-Fi offloading market
From the PEST analysis, several uncertainty factors were
noted for the Wi-Fi offloading market. Of those factors, the
two that had the most significant impact on the market were
then considered key for the scenario analysis, namely:
i. End-user willingness (and/or capability) to install the
offloading client application. Some of the offloading
solutions are enabled on the user-side by downloading
and installation of a client application on the terminal
devices. Therefore, the adoption of the offloading
service will be highly dependent on the end-users
attitude (and/or technical proficiency) in regards to the
installation of the client application. To that end, the
user could be reluctant/unable or willing/able.
ii. Actor who triggers and control the offloading. The
triggering and controlling role could vary from fully
operator-controlled offloading to full end-user control.
Typically, mobile operators gravitate towards
solutions that give them a capability to control the
overall decision-making (who, when, how) for
offloading process due to sensitivity on issues of
churn and revenue erosion, as well as, means for
increasing ARPU (e.g. through onDemand Wi-Fi).
The Wi-Fi offloading market scenarios were then
developed by taking into account the two uncertainty factors.
The resulting four scenarios, namely: spontaneous, value
added, managed and idealistic offloading, are described and
existing solutions are mapped into them in the scenario matrix
of Fig. 2. Considering the commercially-available offloading
solutions, increased competition in mobile Internet access,
limited number of end-user owned Wi-Fi access points, and the
low/moderate technical proficiency of majority of the end-
users [21], the most feasible offloading scenarios for African
operators are value-added and managed offloading.
Figure 2. Scenario matrix
B. Value Network Analysis
Value network analysis enables the definition of actors
(stakeholders), their roles and business interactions amongst
them, and has previously been utilized to evaluate value
network configurations (VNCs) for local broadband wireless
access (3GPP and Wi-Fi access) [22]. In addition to the actors
and roles introduced in [22], this paper defines two additional
new roles relevant for the Wi-Fi offloading business:
offloading equipment provisioning and offloading operation.
The former is a straightforward role whose business actors are
usually the offloading solution vendors (Notava, WeFi,
Greenpacket, etc.). However, the latter offloading operation
role may be played by various actors, such as, the end-user,
fixed broadband operator, mobile operator, or a new business
actor defined here as the offloading service provider (OSP).
As a result, different VNCs could emerge depending on the
identity of the business actor responsible for the offloading
operation.
Since the value-added and managed offloading scenarios
are the most likely for the African market (as noted in
situation analysis of Section III.A), then the business cases
that put mobile operators and OSPs in the offloading operation
role are selected for further value network analysis. The
resulting VNCs are referred to as mobile operator driven and
OSP driven offloading, respectively. The VNC are illustrated
using actor block and interface connector notations adapted
from [22], and shown in Fig. 3.

4. Figure 3. Notation for illustrating value network configurations
The mobile operator driven offloading configuration is
depicted in Fig. 4, whereby the mobile operator typically rolls
out the offloading infrastructure and may own the Wi-Fi
access points. In that case, the mobile operator negotiates with
venue owners (e.g. hospitals) for deployment of Wi-Fi access
points and the fixed broadband operator for access point
backhaul. A few variations to the configuration are possible.
For instance, if the mobile operator is also a fixed broadband
operator, the configuration is slightly modified by merging the
Mobile Operator and Fixed Broadband Access Operator
blocks and absorbing the business interfaces between them.
Uganda Telecoms is an example of an incumbent fixed
operator, with both mobile broadband and Wi-Fi networks
[23]. Alternatively, the mobile operators may also have
agreements with the venue owners (hotels, airports, etc.) who
already operate their own Wi-Fi access points to obtain Wi-Fi
capacity for the offloading service. In this case, the
configuration is slightly changed by moving the Wi-Fi
Network Operation role from the mobile operator to the venue
owner and adding business and technical interface between
venue owner and fixed broadband operator. However, this
approach may be tedious for mobile operators due to the need
to negotiate and maintain contractual agreements with
multiple venue owners that operate access points.
Fig. 5 shows the alternative OSP driven offloading
configuration. Here, the newly introduced business actor, the
OSP, owns the offloading infrastructure and the
Authentication, Authorization and Accounting (AAA)
elements of the Wi-Fi network. It should be noted that in this
case the OSP has access to AAA capabilities, but does not
necessarily operate the Wi-Fi network. This scenario may
manifest through the increasingly common practice of
aggregating Wi-Fi capacity owned by different venue owners.
Boingo Wireless [24] and FON [25] are good examples of
community and commercial based Wi-Fi aggregators,
respectively, who have gained a significant user base across
many countries. Although they have utilized different business
approaches to aggregate the Wi-Fi capacity successfully in a
global scale, so far they yet to have any notable penetration in
most African markets [17]. Considering the fast rising intra-
Africa travel creating demand for data services away from
home networks and the liberalization of the telecom sector
across most African countries giving rise innovative cross-
border service providers, the time is now feasible to devise a
suitable Wi-Fi aggregation approach for Africa.
Figure 4. Mobile operator driven offloading VNC

5. Figure 5. VNC Offloading service provider driven offloading VNC
An alternative configuration is that of the OSP also having
ownership of the Wi-Fi network. In this case the configuration
is changed by moving the Wi-Fi Network Operation role from
the Venue Operator to the OSP. Emerging Wi-Fi network
operators, such as, UhuruOne (Tanzania) [26], may fit this
role, although the coverage of these operators maybe limited
only to certain areas of the urban centers of Africa (Dar es
Salaam, in the case of UhuruOne). The challenge is for the
Wi-Fi network-owning OSP to supplement their coverage by
aggregating Wi-Fi capacity in locations that coincide with the
mobile operators areas of interest traffic offloading. The
aggregation strategy could be national, regional (across
several African countries) or through Wi-Fi roaming
agreements with global players (e.g. Boingo Wireless).
IV. EXEMPLARY BUSINESS MODEL
A high-level exemplary business model for the OSP-driven
offloading is presented in this chapter. The business model is
developed using the STOF model [27], which provides a
theoretical framework for design of business models through
evaluating four inter-related domains, namely: service,
technology, organizational and financial domains. The
developed exemplary business model for the OSP is presented
below for the different domains within the framework.
Service domain: The service concept is that the mobile
operators (customers of the OSP) request offloading service
from the OSP for their subscribers. The OSP may also provide
Wi-Fi on demand service utilizing the same solution used for
the offloading assuming that a suitable legislation exists. The
OSP achieves customer retention through proper
demonstration of the benefits and uniqueness of its offloading
solution.
Technology domain: The technical architecture of the Wi-Fi
offloading solution considered for the exemplary business
model is based Notava’s uAxes solution [15] and illustrated in
Fig. 6.
Figure 6. Technical architecture of the offloading solution (Modified from
[15])
In the stand-alone version of uAxes, the mobile devices
enabled with uAxes SW update the location info (1) to the

6. uAxes Server provided they have active data bearer. The
offloading procedure is initiated by the uAxes server as it
compares device location with operator defined policy. An
example policy defines offloading to take place in congested
cells during the busy hour. Alternatively, if the operator
installs a core network integration component the location and
other usage related information is obtained from the core
network (1b). The server triggers the offloading by sending a
response (1a) or sending an SMS to the uAxes enabled device.
The receiving of the trigger makes the device to activate Wi-Fi
radio and to contact with a uAxes server task specified in the
trigger (5). Using the Wi-Fi scan information the server task
selects the appropriate Wi-Fi access point to be used for
offloading (6) and provides the credentials and the applied
authentication scheme for the device (7). Next the uAxes
enabled device uses the protocols relevant to the applied
authentication scheme (8)–(11).
The architecture is simple, secure and robust, as well as
being scalable in terms of subscribers, mobile platforms, and
Wi-Fi networks. The Wi-Fi network’s scalability is engineered
in a way such that the server task specified in the offloading
trigger may reside in any physical or virtual server machine.
Organization domain: The primary business partners for the
OSP are offloading solution vendors, mobile operators and
Wi-Fi service providers. The business relationships between
these business partners and end users are depicted in Fig. 7.
Financial domain: The OSPs capital expenditure derives
from establishing brand reorganization among the partners
(operators, Wi-Fi providers etc.) and initial deployment of the
offloading server infrastructure. Operational costs incurred
mainly from leasing the Wi-Fi capacity from the providers and
maintaining the offloading server infrastructure (e.g. rental
fees to facilities providers). Mobile operators are charged only
for the successful offloads and the charging is based on the
volume of offloaded traffic. This type of pricing scheme
introduces a low risk solution for the operators, yet potentially
significant revenue stream for the OSP.
V. CONCLUSION
The Wi-Fi offloading service in an African-context has the
potential not just to enhance the user experience but also to
seamlessly extend operators’ broadband Internet service
availability to areas that are under-served or yet to be covered
by their 3G networks. Furthermore, the Wi-Fi offloading
scenarios and value network configurations presented here
highlight significant opportunities for various business actors
(e.g. operators, OSPs, venue owners, etc.) to create and/or
capture value from this relatively new business concept. To
further highlight the feasibility of this opportunity we
presented a high-level exemplary business model based on an
existing offloading solution from Notava to support to enable
an OSP to provide an offloading service to multiple operators.
With handset vendors now targeting multimode mobile
terminals (with mobile 3G and Wi-Fi interfaces) for low/mid
price points and more venue owners in Africa deploying Wi-Fi
hotspots to add value to their core activities, the potential for
the Wi-Fi offloading is continuously growing, and the derived
benefits would be valuable to the end-users as well as
operators.
Figure 7. Value network of OSP offloading business

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