14% of U.S. households could go all wireless: study

wireless
New Street says that the potential group of wireless-only households was 20 million households five years ago and will shrink to 14 million during the next five. (Pixabay)

The increasing speed of wireless has created a landscape in which 14% of U.S. households are in a position to cut their wired connection. This group is shrinking over time, however.

Still, the percentage of households within that contracting base that actually are cutting the cord is increasing, according to a first-quarter trends review from New Street Research.

That portion, which is about 17 million, is growing smaller. "Households at risk have been declining over the last five years and they are likely to decline at an ever faster pace over the next five years as data consumption increases, leaving fewer households that are able to survive on the usage limits placed on them by wireless carriers."

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New Street estimates that almost 40% (about 6.6 million) households in the "risk group" already are wireless-only and that the group that take the plunge may grow to 66%. New Street believes that the declining base of households seeing this as a reasonable alternative means that penetration will slow and the fixed broadband group "should stabilize and eventually accelerate."

New Street says that the potential group of wireless-only households was 20 million households five years ago and will shrink to 14 million during the next five. The key is that increasing consumption will make the 20 GB to 50 GB allowed under most plans labeled unlimited are insufficient.

The report says that factors that will limit "wireless substitution" are lack of good and reliable connections in some homes, the relative inconvenience of wireless, the inability of some apps to work well over wireless and, simply, the lack of need by many millions of households to go beyond the "unlimited" plan data allowances.

New Street says that it is possible that growth of the wireless substitution market will decelerate faster than the rate indicated by the study. It expects the fixed broadband market to grow at a 1.7% to 2% pace through the forecast period. Faster services such as cable and fiber-to-the-home should enjoy a 4% to 6% growth rate.

Not surprisingly, whether or not wireless is a true substitute for wireline is not a settled question. In January, the FCC, in its fact sheet for the 2018 broadband deployment report, maintained that they are distinct categories:

"Both fixed and mobile services can enable access to information, entertainment, and employment options, but there are salient differences between the two. Beyond the most obvious distinction that mobile services permit user mobility, there are clear variations in consumer preferences and demands for fixed and mobile services."

Some observers think the two essentially are equal, however. The Free State Foundation said last week that the FCC should consider wireless a replacementor at least potential replacementfor wired communications, according to a report in Broadcasting & Cable.