Unlimited data fries Wi-Fi
No more overage costs
The Wi-Fi icon — a dot with radio waves radiating outward — glows on nearly every internetconnected device, from the iPhone to thermostats to TVs. But it’s starting to fade from the limelight.
With every major US 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. “Your coffee shops may be less compelled to provide Wi-Fi for you now.”
In an all-the-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.
That means businesses are 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, 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. “Customers are rational. When pricing incentives favor Wi-Fi, customers use more Wi-Fi. When pricing incentives shift, so does behavior.”
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 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 Wi-Fi Alliance.
“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.”
Wi-Fi has survived 20 years and spurred a roughly $20 billion industry of gear, service providers and chipmakers.
But it’s now under threat from more than just unlimited plans. There’s also the coming spread of 5G wireless technology, which promises to let consumers download a high-definition movie in less than a second.
Wireless carriers can deploy 5G faster and easier by employing some new piggyback technologies to use the shared airwaves instead of trying to acquire spectrum licenses at auction or through deals.
In the nearer term, Wi-Fi is already starting to disappear from people’s daily routines.
“Before, I would have to go and find a Wi-Fi hot spot, which was very inconvenient for me,” said Michael Kimbrough, an entrepreneur in Birmingham, Ala., who last month signed up for an unlimited data plan from Verizon Wireless. “Now I don’t have to do that.”