The short answer
Use PPPoE for home and office subscribers on monthly plans, a hotspot for shared or public WiFi sold by the hour or day, and DHCP/IPoE for fibre ONTs and routers that can’t dial PPPoE or customers who need a fixed IP. Most growing ISPs run all three, on the same MikroTik routers and the same billing system.
The three connection types at a glance
| PPPoE | Hotspot | DHCP / IPoE | |
|---|---|---|---|
| How customers connect | Username and password set on their router | Log in on a web page in the browser | Plug in; the network recognises the device |
| Identified by | PPPoE username | Login, voucher or phone payment | Device MAC address |
| Best for | Homes and offices on monthly plans | Public and shared WiFi, short plans | Fibre ONTs, simple routers, fixed IPs |
| Typical plan length | Weeks to months | Minutes to days | Weeks to months |
| Customer setup | Configure the router once | None | None |
| Cut-off at expiry | Session disconnected | Session ends at time limit | Lease not renewed |
| Fixed IP possible | Yes | Rarely used | Yes |
PPPoE: the default for home and office subscribers
PPPoE (Point-to-Point Protocol over Ethernet) gives each customer a username and password that their router uses to “dial” your network. Every customer gets their own session, which makes it easy to apply a speed limit, count data and disconnect exactly one account.
Why ISPs like it
- Each session belongs to one known customer, so billing and support are simple.
- Speed limits and plan details come from RADIUS at login.
- Moving a customer to another router or building keeps the same login.
- Almost every customer router supports it.
The trade-offs
- Someone has to type the username and password into the customer’s router.
- The PPPoE header uses 8 bytes, so the usual MTU is 1492 instead of 1500.
- Some ONTs and cheap routers can’t dial PPPoE at all.
In Wave, PPPoE billing handles plans, invoices, reminders and disconnection at expiry automatically, and reconnects customers the moment they pay with M-Pesa.
Hotspot: selling WiFi to people who just walk in
A hotspot uses a captive portal: anyone can join the WiFi, but the router sends them to a login page until they pay, enter a voucher or sign in. It is the natural choice for estates, shops, campuses, hostels and anywhere people want internet for an hour or a day.
- No setup on the customer’s phone or laptop.
- Short plans (an hour, a day, a week) suit casual users.
- With M-Pesa on the login page, nobody has to sell vouchers by hand.
- Logins are usually per device, which suits phones and laptops better than whole households.
Wave’s MikroTik hotspot billing gives you a branded login page in English and Kiswahili, M-Pesa checkout straight to your till, and printable vouchers.
DHCP / IPoE: plug-and-play customers and fixed IPs
IPoE (IP over Ethernet) skips the login entirely. The customer’s device asks for an address by DHCP, and the router checks with the billing system whether that device’s MAC address belongs to a paid-up customer before answering.
- Works with fibre ONTs and routers that can’t dial PPPoE.
- No tunnel overhead: the full 1500-byte MTU.
- Good for business customers who need a fixed IP.
- Cut-off happens by not renewing the device’s lease, so leases must be short.
Wave’s DHCP/IPoE billing uses RADIUS-backed DHCP with leases of 15 minutes or less that never run past the end of a plan, and lists new devices so you can add them in one click.
How to choose (and why you probably need more than one)
- Selling to households on monthly plans? Start with PPPoE.
- Selling to passers-by, students or tenants by the hour or day? Use a hotspot.
- Customers with ONTs or routers that can’t do PPPoE, or who need a fixed IP? Use IPoE.
- Growing? Run them side by side, each on its own router port, with one billing system for all of them.
On MikroTik, each connection type can live on its own port of the same router. In Wave you assign every port to PPPoE, hotspot or DHCP/IPoE, and all customers share the same packages, M-Pesa payments, reminders and reports.
Frequently asked questions
Is PPPoE better than DHCP for an ISP?
PPPoE makes per-customer authentication and accounting simple and is the usual choice for subscribers. DHCP/IPoE avoids router setup and PPPoE overhead and suits ONTs and fixed-IP customers. Many ISPs use both.
Can one MikroTik router run PPPoE and a hotspot at the same time?
Yes. Put each service on its own port or VLAN. Wave lets you assign each port to PPPoE, hotspot or DHCP/IPoE.
What MTU should I use for PPPoE?
PPPoE adds an 8-byte header, so 1492 is the usual MTU on a standard 1500-byte Ethernet link.