The Death of WiFI Hotspots?

I’ve been thinking about the new unlimited data plans and wondering what impact they will have on public WiFi. As I wrote in a recent blog, none of the plans from the major cellular carriers are truly unlimited. But they have enough data available that somebody who isn’t trying to use one of these plans for a home landline connection will now have a lot more data available than ever before.

The plans from the big four carriers have soft monthly download caps of 22 Gigabytes or higher, at which point they throttle to slower speeds. But 22 to 30 GB is a huge cap for anybody that’s been living with caps under 5 GB or sharing family plans at 10 GB. And to go along with these bigger caps, the cellular companies are also now offering zero-rated video that customers can watch without touching the data caps. That combination is going to let cellphone users use a mountain of data during a month.

So I wonder how many people who buy these plans will bother to log onto WiFi in coffee shops, airports and hotels any longer? I know I probably will not. For the last few years I’ve seen articles almost weekly warning of the dangers of public WiFi and I’ve become wary of using WiFi in places like Starbucks. And WiFi in other public places has largely grown to be unusable. WiFi can be okay in business hotels in the early afternoon or at 3:00 in the morning, but is largely worthless in the prime time evening hours. And free airport WiFi in the bigger airports is generally already too slow to use.

If you think forward a few years you have to wonder how long it’s going to take before public WiFi wanes as a phenomenon? Huge numbers of restaurants, stores, doctor offices, etc. spend money today on broadband and on WiFi routers for their customers and you have to wonder why they would continue to do that if nobody is asking for it. And that’s going to mean a big decrease in sales of industrial grade WiFi routers and landline broadband connections. Many of these places already buy a second data connection for the public and those connections will probably be canceled in droves.

I wonder how much sense it makes for Comcast and others to keep pouring money into outdoor hotspots if people stop using them? You only have to go back a few years to remember when the concept of building the biggest outdoor hotspot network was the goal for some of the largest cable companies. Already today my wife has to turn off her WiFi when running in the neighborhood since her phone constantly drops her music stream through attempts to change to each Comcast WiFi connection she runs past. How many people with these unlimited plans will even bother to ever turn on their WiFi?

I also wonder if the cellular networks are really ready for this shift. There is a huge amount of data shifted today from cellphones to hotspots. As a business traveler I’m already thinking about how hard it might be soon to get a cellular data connection during the business hours if nobody is using the hotel WiFi. I know that 5G is going to fix this issue by offering many more connections per cell site, but we aren’t going to see widespread 5G cell sites for at least five years and probably a little longer.

I’ve always found it interesting how quickly changes seem to hit and sweep the cellular industry. There was virtually no talk a year ago about unlimited data plans. In fact, at that time both AT&T and Verizon were punishing those with legacy unlimited plans to try to drive them to some other plan. But the industry has finally plateaued on customer growth and cellular service is quickly becoming a commodity. I think a lot of us saw that coming, but I never suspected that the way it would manifest would be with competition of unlimited calling and the possible death of public WiFi. I don’t know if this industry will ever stop surprising us at times.

I guess a day could come soon when kids will have no memory of public hotspots. I can remember fondly when traveling to places like Puerto Rico or the Caribbean that the first thing you did on landing was find the locations of the Internet cafes. I remember back when our company decided to move out of our offices that one of my partners practically lived in a Starbucks for the next year. It was an interesting phase of our industry, but one whose days are probably now numbered.