A World Without Wi-Fi Looks Possible as Unlimited Plans Catch On
A World Without Wi-Fi Looks Possible as Unlimited Plans
Catch On
Unlimited mobile data plans, competing systems pose
threats
‘You could see a big switch’ in consumer behavior:
analyst
by Olga Kharif March 9, 2017, 2:00 AM PST
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.”
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-binging 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.
Crowded Airwaves
A new system called LTE in Unlicensed Spectrum -- or
LTE-U, which depends on a combination of new small-cell towers and home
wireless routers -- risks congesting the spectrum upon which Wi-Fi relies. In
decades past, the nation’s unlicensed airwaves were mostly known for their use
by garage door openers, cordless phones, and the occasional baby monitor. Now
they’re full of traffic from Wi-Fi networks that connect smartphones, laptops,
set-top boxes, game consoles, and a whole host of smart devices to the internet.
As LTE-U moves in, Wi-Fi may get drowned out.
“Places where operators have traditionally looked to
Wi-Fi, they’ll leverage LTE-U,” said Kyung Mun, an analyst at researcher Mobile
Experts.
Developed by cellular carriers and their vendors, LTE-U
may act as a disincentive for companies experimenting with Wi-Fi calling,
including Comcast, and those dabbling in fiber networks, like Alphabet Inc.’s
Google.
But LTE-U also benefits users. Consumers don’t have to
type in passwords and sign in to every network like they do for public Wi-Fi
hot spots. They can seamlessly move between their carriers’ cellular network
and LTE-U, and not really know the difference.
LTE-U -- and a related cellular advancement, LTE-LAA --
will also require less equipment. A 180,000-square-foot building would need 24
new access points instead of about 80 Wi-Fi hot spots, according to Amit Jain,
vice president of marketing and product management at hardware maker
SpiderCloud Wireless, which plans to ship LTE-U and LTE-LAA equipment in the
second quarter. However, the total cost of deployment will be similar to Wi-Fi,
Jain said.
Annual shipments of LTE-U/LTE-LAA-capable access points
will increase to about 1.1 million units globally by 2020, up from tens of
thousands in 2016, according to Mobile Experts.
“You could see LTE in the house, in the enterprise, and
the role of Wi-Fi morphing into something different: a legacy technology,” said
independent wireless analyst Chetan Sharma.
Companies like Cisco Systems Inc., the No. 1 manufacturer
of Wi-Fi access points, are already considering developing new gear that can
accommodate both Wi-Fi and LTE-U technologies.
“It’s too early to say what will win out,” said Mike
Iandolo, vice president and general manager at the mobile technology group at
Cisco. “LTE has an advantage, but there’ll still be a place for Wi-Fi.” The
company’s goal is to ensure its Wi-Fi portfolio evolves to meet the needs of
customers, he said.
Citizen Action
Another technology that risks making Wi-Fi outmoded is
something called CBRS, short for Citizens Broadband Radio Service. The new
system lets anyone share a huge swath of spectrum currently being used by the
U.S. Navy. In February, Nokia Oyj, Alphabet and Qualcomm tested LTE technology
on the airwaves to broadcast a live high-definition video of cars racing on a
track in Las Vegas.
More reliable than Wi-Fi, CBRS may ultimately be a better
option for factories, airports and ports, according to Michael Peeters, head of
innovation portfolio management at Nokia and president of CBRS Alliance, whose
membership includes AT&T Inc., Charter Communications Inc. and Comcast. The
first CBRS devices should be certified for use in mid-2017, he said.
On top of all these threats to Wi-Fi is the coming spread
of 5G, which promises to let consumers download a high-definition movie in less
than a second. By using CBRS, wireless carriers can deploy 5G faster and
easier, using the shared airwaves instead of trying to acquire spectrum
licenses at auction or through deals.
Ericsson CEO Ekholm Says 5G Is Starting to Happen
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, Alabama, who last month signed up for an unlimited data plan from
Verizon Wireless. “Now I don’t have to do that.”
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