That’s the billion dollar question right now – and here’s the analysis:
Wi-Fi carries some 80% of mobile device traffic (mostly in home or office) and is by a long shot the most economical means of data delivery to any wireless device. In the US a new breed of ‘Wi-Fi First’ service providers are trying their hand at ‘Wi-Fi First’: Republic Wireless, Scratch, and FreedomPop. The idea is simple: When you’re on (free) Wi-Fi nearly all of the time, why pay more than a couple of dollars for the little bit of data & voice that you may need on cellular?
The challenge in getting ‘Wi-Fi First’ to market is partly commercial, partly technical. In the US there’s a lot more quality free Wi-Fi in public places than in Europe – although cable giant Liberty Global (including Wi-Fi NOW speaker Ziggo) and others are working on that. A lot of US public and private (home) Wi-Fi is already controlled by for example cable giant Comcast, who is rumoured to be launching a ‘Wi-Fi’ First-type wireless service within 6 months.
Conceptually, Wi-Fi for dirt-cheap capacity and cellular for coverage is the perfect wireless marriage. But the technicalities of the marriage still need to be worked out, although excellent progress is being made by for example Republic Wireless: The company is right now perfecting seamless voice handoff between 3G (circuit-switched calls) and Wi-Fi in both directions. Google is doing something similar with it’s Project Fi.
So how long before some company develops a permanent fix to the seamless Wi-Fi / mobile handoff issue?
I believe we’re less than a year from that and I believe the issue will be fixed from the device side. The benefits of Wi-Fi First are so overwhelming that either Apple, Google, or someone else will fix it. And the threat to the established mobile service provider industry (especially in the US although this will likely migrate to Europe eventually) is serious.
Imagine this scenario: The device gets to choose what network to connect to, and (nearly) all the time that network will be Wi-Fi. That in turn means that the folks controlling the device side (Apple, Google, etc.) will get to pick the network. And big financial consequences will ensue.
My excellent colleague Francis McInerney of North River Ventures says “wireless carriers worldwide are about to be reduced to a bunch of screaming taxi drivers as their business model vanishes into the Black Hole of Uberization.” Read Francis’ take on the convergence story here.
For a lot more on ‘Wi-Fi First’ and mobile / Wi-Fi convergence don’t miss expert speakers Kevin Francis of Ruckus Wireless and Lonnie Schilling of Birdstep at Wi-Fi NOW Amsterdam. We’ll take a detailed look at convergence from the network & device sides. Register here!