A system and method for bandwidth sharing in a distributed wireless client application using inverse multiplexing termination. The system includes: a group of collocated client playback devices having wide area network (WAN) and local area network (LAN) connectivity, and a centralized inverse multiplexing (IMUX) server which optimizes shared bandwidth of both the WAN via inverse multiplexing and the LAN using either broadcast or multicast of all virtual multiplexing paths to all other client playback devices of the group of collocated client playback devices. Other embodiments are disclosed.