Wednesday, December 29, 2021

Wi-Fi Value Has Changed Since 3G

The perennial debate over Wi-Fi ability to substitute for mobile network access will not change in the 5G era. But user behavior could change as moble access speeds become a functional substitute for fixed (Wi-Fi) access and as unlimited-usage plans eliminate the financial incentive to switch to Wi-Fi access. 


Beyond a fairly low threshold (perhaps 25 Mbps to 50 Mbps), most apps do not benefit from higher access speeds. With a few exceptions, the primary benefits of higher-speed connections (500 Mbps to a gigabit per second) are enough bandwidth to support multiple devices and users simultaneously, plus any financial advantages of unlimited-usage plans, higher return bandwidth or other values bundled with the connection. 


As has been the case in the 4G era, Wi-Fi access might have more value for multi-user households; less value for single-user households and households where every inhabitant pays for their own mobile access. 


Mobile-only access wil have higher value for lower-income households and users, phone-centric users and younger adults. 


Unlimited-usage data plans will eliminate the financial incentive to switch to Wi-Fi, at least when mid-band spectrum is available to support 5G access, as there will not generally be a speed incentive to switch to Wi-Fi access. 


On the other hand, signal strength could be a more-inportant driver of behavior. Indoor signal coverage has been an issue since mobile operators began using frequencies around 2 GHz. Should that become a worse problem when other mid-band frequencies in the 3.5 GHz to 6 GHz range are used, then Wi-Fi offload will still make sense. 


In the 3G era, the advantage of switching to Wi-Fi was speed. In the 4G era the advantage was cost. In the 5G era, the advantage could often be signal strength. 

 

But T-Mobile believes customers of its unlimited usage  5G service are starting to rely on the 5G network and not shifting access to Wi-Fi. 


In mid-December 2021, T-Mobile said “13 percent fewer MAX users are connecting to Wi-Fi, 80 percent more are hosting a Wi-Fi hotspot and their hotspot usage is up 20 percent on average during the weekends.”


That is not unexpected, as the leading mobile service providers shift users to higher-priced unlimited usage plans that eliminate the financial incentive to switch to Wi-Fi. 


In 2021, Wi-Fi represented as much as 46 percent of total global end user IP traffic, according to Cisco. Mobile networks supported about 17 percent of total end user IPtraffic in 2021. Fixed networks delivered nearly 53 percent of internet traffic in 2021, compared to the share delivered by mobile networks, at about 21 percent, Cisco says. 


Usage varies by market. In India, about 98 percent of total internet access uses a mobile device. Globally, mobile users consume as much as 60 percent of total data on fixed networks (Wi-Fi).


In recent years, U.S. mobile customers have spent about half their connected time on Wi-Fi (fixed network), not the mobile network


By 2023, U.S. mobile users might offload as much as 75 percent of data consumption to fixed networks, some in the Wi-Fi community believe. But much hinges on how consumers behave when they have unlimited usage plans, which might reduce Wi-Fi consumption. 


source: Cisco, WiFiForward 


It might also matter how mobile tariffs are shaped. Home broadband allows multiple users and devices to share a single account. As mobile plans move towards unlimited usage, and if multi-user plans create incentives for smartphones to remain on the mobile network all the time, and if indoor reception is not an issue, then more users might remain connected to the mobile network all the time. 


An Ericsson study found that 5G customers on unlimited-usage plans reduced their reliance on Wi-Fi. In markets such as the United States, Taiwan, Switzerland, Finland and South Korea, where a higher proportion of 5G users are on unlimited plans, 22 percent have decreased their home Wi-Fi usage, while 14 percent have stopped using Wi-Fi after upgrading to 5G, Ericsson found.


Older data (from 2016) shows the same pattern. A 2018 analysis suggested that unlimited-usage mobile data plans decreased use of Wi-Fi by about eight percent. 


source: Nielsen 


Motivations can change over time. In the 3G era, users switched to Wi-Fi because Wi-Fi was faster than 3G. In the 4G era, when 4G was generally faster than Wi-Fi, the switch to Wi-Fi made sense because it reduced mobile data plan usage. 


The 5G pattern is not so clear, at least not yet. Assuming the financial benefit of switching to Wi-Fi is not present, then speed, signal stability or other advantages could be decisive. 


No comments:

Will AI Fuel a Huge "Services into Products" Shift?

As content streaming has disrupted music, is disrupting video and television, so might AI potentially disrupt industry leaders ranging from ...