Wi-Fi is ubiquitous.
No longer the realm of coffee shops and homes, Wi-Fi spans entire neighborhoods. Trains, planes and automobiles are Wi-Fi equipped. Cruise ships have Wi-Fi. Comcast has even made every customer’s router into a public Wi-Fi hotspot.
That’s good news if you’re a cell phone user. The more you email, watch Netflix, stream Pandora and surf Facebook over Wi-Fi,the fewer gigabytes you have to buy from your cell phone company. Plus, calls and texts are now able to be sent over Wi-Fi too.
So what do you need your cell phone company for?
A new generation of hotspots lets you seamlessly switch between Wi-Fi and 4G-LTE service, and they offer improved encryption. But Wi-Fi’s security issues likely won’t be resolved by 2016, Macquarie predicts.
Still, the clock is ticking for 4G.
4G’s limitations are inherent in the technology that makes it work: Airwaves are limited, and you can only cram so much data into one MHz of spectrum.
That’s why the two biggest carriers — AT&T and Verizon — place data caps on their customers. Only about one-third of U.S. cable customers have an idea of how much data they’re downloading each month on their home Wi-Fi networks, but two-thirds of wireless customers track their usage, according to Macquarie.
Verizon, for example, could be offloading as much as a quarter of its mobile data traffic onto Wi-Fi networks by 2018, Macquarie predicts, costing the company nearly $1.4 billion a year in lost revenue.
Verizon could recoup those lost sales by partnering with cable companies like Comcast. Verizon could sell Comcast its wireless airwaves, providing Comcast with a 4G “quad-play” option.
That’s why wireless carriers will likely be jockeying for position to partner with cable companies, particularly Comcast. With Sprint’s sub-par 4G network, AT&T’s ties to U-Verse, and Verizon’s FiOS and congestion issues, T-Mobile is the likeliest wireless company to win over Big Cable, Macquarie predicts