Tablet Trend Helping Wi-Fi Instead of Cell Carriers

Tablet Trend Helping Wi-Fi Instead of Cell Carriers

Photo by Oran Viriyincy - http://flic.kr/p/as4zMi

If you received an iPad for Christmas, there is a 95 percent chance you connected to a local Wi-Fi network to slurp up data, a new study predicts. Where does that leave cellular carriers? Out in the cold with their expensive data plans and 3G tablets, that’s where. The really bad news for folks like Sprint is the trend for 9.5 out of 10 tablets to exclusively use Wi-Fi doesn’t appear to be changing.

The bringer of bad news is Sandvine, a company that keeps track of how mobile devices are used. The problem with tablets is that they are not as mobile as carriers would prefer. Instead of taking them where the only Internet connection is cellular-based, many iPad owners simply jump on their home Wi-Fi network or the corner cafe’s hotspot. Like much in life the reason boils down to cost.

First off, a 3G tablet costs more than a Wi-Fi only device. This is why Amazon’s Kindle Fire only offers Wi-Fi. The second is to use the 3G, you need to buy a separate data plan for your iPad, since there is no sharing your iPhone’s data bucket. That could change in 2012 when Verizon Wireless is expected to introduce a family data plan.

The advent of so-called “pooled plans” won’t mean automatic milk-and-honey for carriers. Subscribers will still watch their data allowance like a hawk to prevent being socked with huge overages because they just love the new batch of cat videos on YouTube.

If carriers can’t make it with data plans, there is still the texting racket, where providers pay pennies for for an SMS message to piggyback along voice signals, but charge $20 per month for unlimited usage, right? Maybe not for long.

According to Sandvine, tablet users and smartphone owners are quickly turning to iMessage, BlackBerry Messenger or WhatsApp. Instead of paying for a texting plan or $0.20 a pop, mobile device users are taking a page from carriers and using a fraction of their data plan to send texts. But this trend certainly shouldn’t worry carriers, should it? Think again, grasshopper.

The study found in the Asia-Pacific markets 8 percent of consumers avoid SMS charges by using WhatsApp. Just think what havoc could be unleashed if teenage U.S. girls discover this option? It just sends shivers down the coldest carrier.

So, let’s review: fewer people make phone calls, so carriers turn to data plans to recoup their losses. The Wi-Fi iPad is born and people attach themselves to Wi-Fi networks, giving 3G fees the big kiss-off. SMS is a lucrative way to squeeze cash from consumers sending billions of text messages each day. Apps like iMessage come along, allowing iPad owners to bypass texting fees. Where does that put carriers? You don’t need the Where’s My iPhone app to know your up a creek without a paddle.

Related
  • JJ

    The handful of people I know who bought or got iPad’s for Christmas this year only bought the WiFi version. I never understood buying a separate data plan for an iPad, it’s such a waste of money.

  • Srose428

    I have a 3G Ipad 2 and I never plan to ever use the 3G, in fact because I am grandfathered into AT&T’s unlimited data I would be more likely to jailbreak my iPhone 4s and tether the two devices. Cell data speeds fluctuate and can be painfully slow, even taking advantage of HSPA+ on AT&T, I still bump WiFi whenever it is available. 

  • joewaylo

    Well the carriers do see some benefit. That is if your WiFi is provided by AT&T and Verizon via their fiber optic companies. Then they are raking in money on their broadband industry. FiOS and U-Verse would be collecting those $40 a month to go along side the rest of the amount in WiFi, Cable, and Telephone.

  • joewaylo

    Regards to tethering, AT&T banned that though on some of those pesky Cydia hotspot apps a few months ago. They were able to detect the ones that used way more GBs in a rapid pace.

  • Jordan Clay

    You can’t JB a 4s.  You can pay a $99 developer fee and sideload an open source tethering app like iProxy.  $99 a year is still a LOT cheaper than $25/ month for 5gb of tethering

  • Jordan Clay

    I have the WiFi ipad.  I can’t justify another $130 for 3g and another $25/month when almost every place I go has WiFi.

     Plus,  I’m going to contribute AS LITTLE money as possible to AT&T every month. 

  • Seth Chapman

    3G would get used much more on these devices if, when you signed up for service with AT&T/Sprint, you could have all applicable devices use the same 3G connection/service. Kinda like with landlines, where you can connect 20+ devices to your router and have it connect and use the same service. But paying a separate data plan for your laptop, iPhone, iPad, and whatever else? Insanity.

  • jim cancil

    Not a waste for me.  We cut the Verizon (azz’holes..) wire because of no DSL and lousy service to our home.  Put up an antenna to pull from ATTs tower about 5mi away .. and now have at least some internet access.  (What a wonderful country – 125mi from Wash DC.. poor communications?!)  We still have to come to town to access enough bandwidth to buy airline tickets and other intensive ops, but…No more 6-9pm spam calls!  (the ones that workaround the DNC list)    Jim

About the author

Ed SutherlandEd Sutherland is a veteran technology journalist who first heard of Apple when they grew on trees, Yahoo was run out of a Stanford dorm and Google was an unknown upstart. Since then, Sutherland has covered the whole technology landscape, concentrating on tracking the trends and figuring out the finances of large (and small) technology companies.

(sorry, you need Javascript to see this e-mail address)| Read more posts by .

Posted in News | Tagged: , , , , , , |