Sooner or later, your wireless carrier will become just a glorified ISP

November 1, 2013

The distinction between your Internet provider and your cellphone service seems obvious. One helps you connect to YouTube. The other helps connect your calls.

But not long from now, your wireless carrier will probably be making much of its money in the same way that your ISP does — by selling you Internet.

With the rise of smartphone messaging apps, people are using SMS less frequently than before — and that's digging into the profits of wireless companies.

Voice service has seen an even more alarming decline, as this chart from Bloomberg Businessweek indicates.


(Graphic by Bloomberg Businessweek. Data: FCC, Wireless Intelligence, Ovum, U.S. Census Bureau)

The good news for carriers is that data-related income is rising. It may not be enough right now, but it's growing. If these trends continue, Internet access may soon become wireless companies' most lucrative service.

This holds all kinds of implications for the industry. Think of the policy debates that are raging over wired broadband — net neutrality, affordability, access. Pretty soon, those arguments are going to spill over into the wireless business. The entities involved will continue to operate differently, given the varying types of costs in either space (wired broadband companies, for instance, don't have to fight over wireless spectrum). But to most consumers, the difference might simply come down to whether that week's bill concerns mobile Internet or home Internet.

Brian Fung covers technology for The Washington Post, focusing on telecom, broadband and digital politics. Before joining the Post, he was the technology correspondent for National Journal and an associate editor at the Atlantic.
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Brian Fung · November 1, 2013