A World Without Wi-Fi Looks Possible as Unlimited Plans Rise

A World Without Wi-Fi Looks Possible as Unlimited Plans Rise
By Olga Kharif
Mar 9 2017
https://www.bloomberg.com/news/articles/2017-03-09/a-world-without-wi-fi-looks-possible-as-unlimited-plans-catch-on

The Wi-Fi icon — a dot with radio waves radiating outward — glows on nearly every internet-connected device, from the iPhone to thermostats to TVs. But it’s starting to fade from the limelight.

With every major U.S. wireless carrier now offering unlimited data plans, consumers don’t need to log on to a Wi-Fi network to avoid costly overage charges anymore. That’s a critical change that threatens to render Wi-Fi obsolete. And with new competitive technologies crowding in, the future looks even dimmer.

“You could see a big switch,” said Tim Farrar, founder of Telecom Media Finance Associates Inc. “Your coffee shops may be less compelled to provide Wi-Fi for you now.”

In an all-data-you-can-eat world, consumers’ use of Wi-Fi at public places like stadiums and airports will drop to a third of all mobile data traffic from about half, Farrar estimates. This means businesses not upgrading public access Wi-Fi as often. Smartphone users might not even turn on their Wi-Fi capability, according to Barry Gilbert, an analyst at researcher Strategy Analytics in Boston.

“At Sprint Corp., where unlimited plans are the norm, customers aren’t waiting until they get to a Wi-Fi hot spot to watch the latest video. They are staying on cellular,” said Craig Moffett, an analyst at MoffettNathanson LLC. “Customers are rational. When pricing incentives favor Wi-Fi, customers use more Wi-Fi. When pricing incentives shift, so does behavior.”

At home as well. Almost a third of people don’t use a home broadband internet connection because they have an unlimited data plan on their phones, according to a survey released Thursday by ReportLinker.

The erosion of Wi-Fi’s influence is likely to be slow and uneven. While unlimited data plans make the technology less necessary for phones, many home devices, from a MacBook to an Amazon Echo, still use Wi-Fi to connect to the internet. Wi-Fi also helps fill in gaps in some office buildings and homes that have spotty cellphone coverage.

Some wireless carriers also still rely on Wi-Fi networks to handle a large portion of the growing volume of internet traffic. Putting all of that Netflix-bingeing and Spotify-listening on cellular networks could strain capacity.

“Wi-Fi has consistently stayed ahead in terms of performance and its ability to move large amounts of data,” said Kevin Robinson, vice president of marketing for the Wi-Fi Alliance, a consortium of more than 700 companies, including Apple Inc., Samsung Electronics Co. Ltd., LG Electronics Inc., Intel Corp., Qualcomm Inc. and Comcast Corp. “The market is going to decide which technology provides the best capabilities for the end user. To displace a technology like Wi-Fi is likely very optimistic.”

Unlimited plans aren’t the only threat. Wi-Fi has survived 20 years and spurred a roughly $20 billion industry of gear, service providers and chipmakers — mainly because its technology is open to innovation and it operates freely in the nation’s unlicensed airwaves. Wi-Fi now faces competition from other technologies that also run in those same frequencies.

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