Why is the Wireless Business Such a Slam-Dunk?

Casey Snook’s parents were mad — and understandably so.

The 14-year-old Briton was on a five-day vacation in New York with her mom this summer, snapping pictures of the Big Apple to share with her friends on Facebook. None of that is particularly remarkable, though. The trouble came later, when Casey’s dad got the cellphone bill…

The teenager had racked up $6,000 in data roaming charges, a pretty hefty price tag just for posting some pictures to Facebook.

Casey’s story isn’t an anomaly.

Last year, an 11-year-old Canadian boy rang the register for $22,000 after three days of video streaming on his dad’s cellphone during a family vacation to Mexico. And in 2011, T-Mobile billed a Florida woman $201,000 after her brothers went to town with data usage on a two-week trip to Canada.

These stories seem unthinkable in today’s superconnected world. But the reality is that getting an Internet connection while traveling is still the Wild West of the telecom world. That’s why tiny wireless carriers looking to change that could potentially make you a fortune in the process.

Why is the wireless business such a slam-dunk?

We have become ravenous consumers of digital information. For the five-year span between 2012–17, mobile data traffic is estimated to increase 13 times, to more than 11.2 exabytes per month. That’s enough bandwidth to transfer a copy of all the content in every academic research library in the United States…2,000 times.

But it’s not just that data consumption is through the roof — people also expect to be able to access that data from anywhere, anytime. That’s why wireless carriers are seeing such a surge in the data volumes that pass through their networks.

There are some real problems with wireless data roaming. For starters, it’s incredibly expensive; while technological advances have lowered costs for most of the technological services we consume, wireless data costs have actually gone up, not down.

Major carriers like AT&T and Verizon have locked down their unlimited data plans, instead charging subscribers for limited amounts of bandwidth per month. If you go over, you pay more.

Cellular data coverage can also be spotty. While the latest LTE towers can now match the broadband download speeds you get from a fixed line, buildings can block signals or make them unusable.

Device availability is another big problem. Select few laptops come with built-in cellular antennas, and even most tablets today aren’t cellular-enabled. At last count, around 90% of all iPads sold are Wi-Fi only.

For travelers — particularly business travelers — those factors present a big problem. When you’re away from the office, especially overseas, turning your email off isn’t always an option.

Wi-Fi solves some of the problem. It’s far cheaper to connect your laptop or smartphone to a hotel’s Wi-Fi network than to connect to cellular data. But Wi-Fi has plenty of detractors of its own — the biggest is that there’s no unified Wi-Fi carrier. Instead, users have to connect to a patchwork of free or paid wireless networks, each with varying degrees of security, speed and availability. It’s not as simple as turning on your phone and hitting the Web.

What we need is a solution that combines the simplicity of an always-on cellular network with the cost and connection strength of Wi-Fi.