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Wi-Fi’s Threat To Cellular May Be Overstated

One of the subtle jokes in Woody Allen’s 1972 pre-mobile phone era film “Play It Again, Sam” concerns a character’s habit of calling his office to pass on the various phone numbers at which he can be reached through the day. Its a joke that might become relevant again as Wi-Fi based wireless services, requiring people to plan ahead for Wi-Fi availability, become more common.

Recent moves by Google and Cablevision to launch mobile services relying primarily on Wi-Fi, with one expected from Comcast soon, has focused attention on Wall Street and in the media about the potential of low-cost Wi-Fi services to erode cellular carriers’ hold on the mobile market.

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While these low-priced services may be “good enough” for some people, not everyone is willing to trade quality for a lower price. When assessing the potential popularity of new services, it’s easy to overestimate what art critic Robert Hughes called “the shock of the new” on consumer habits.

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When it comes to mobile wireless, cellular’s capacity limits are well documented—which is why carriers are investing in more spectrum. But Wi-Fi faces its own capacity challenges, particularly as usage grows.