By Simon Bond

The amount of traffic moving to Wi-Fi from cellular is skyrocketing. According to the US based CTIA Wireless Association, cellular data traffic grew 26% in 2014 over 2013, while traffic on Wi-Fi networks grew over 60%, more than double the cellular growth rate. This is further evidence that a Wi-Fi first world is here. The second major trend is small cell proliferation and network densification. According to the CTIA, the number of towers actually declined by 2% in 2014 while the number of small cells grew exponentially.

How is a Wi-Fi plan different from a regular cellular plan?

Historically, cell phones have delivered phone calls, text messages and Internet data using cell towers owned and operated in the US by wireless carriers like Verizon or AT&T. This system has created extremely widespread networks that let people make calls and access the web from almost anywhere in the US. But it also means the networks are extremely expensive to operate, so carriers charge customers high monthly fees to maintain them.

Several factors are converging to make “Wi-Fi first” highly disruptive. First, data shows that nearly 90% of calls via mobile phones are made from home, workplaces and commercial facilities that often have Wi-Fi. Relatively few are made while actually mobile, and out of range of a Wi-Fi hotspot. Second, public Wi-Fi hotspots have proliferated in recent years— numbering around 6 million in America alone, according to the Economist. Third, technology has now progressed to where calls can seamlessly be transferred between Wi-Fi and cellular networks. Apps and embedded software can also check for Wi-Fi quality before connecting and falling back to cellular only when needed.

Sophisticated methods enable traffic streams to be blended from Wi-Fi and cellular based on cost and signal availability. For instance, when FreedomPop’s technology detects a Wi-Fi signal is getting weak, it automatically establishes a second connection and moves the call over as needed. An increasing amount of activity on mobile phones is now being done using Wi-Fi networks instead of cellular networks. People can easily set up Wi-Fi in their own homes, while many businesses and municipalities are starting to offer Wi-Fi access for free.

Cablevision has also been building its own network of Wi Fi hotspots for use by its home Internet subscribers when they’re on the go.

In the US, Cablevision is now betting that its Wi-Fi hotspots are so widespread that it can build an entire mobile network around them. That means you’d use Wi-Fi not only to surf the Web at home, but also to send texts and make phone calls while out and about.

What are the advantages of a Wi-Fi cell phone plan?

The biggest differentiator would be price. Cablevision’s new Wi-Fi service, dubbed Freewheel, will cost $US29.95 per month for new individual customers or $US9.95 per month for customers who already subscribe to the company’s Optimum Online Internet service.

A recent survey by research firm Cowen and Company found the average monthly cell phone bill on Sprint, Verizon or AT&T is about $US140, though that factors in both individual and family plans.

To me that sounds like further dismantling of a walled garden, it won't happen overnight but it will be another arrow in the quiver of creative destruction.