Summary
The Carrier is more than a spectrum landlord.
Even if spectrum was suddenly limitless and free the existing carriers would still have significant scale and experience providing advantages over new wi-fi startups. An analysis of North American carrier cash cost per user (CCPU) proves this.
Wi-Fi can potentially free up spectrum for carriers.
If a carrier has a number of subscribers using wi-fi in their homes that leave excess spectrum capacity in the same geographic area.
Technology advances will overcome current limitations.
Yes battery life is an issue but it has improved 3x in the last year. Yes coverage has limitations and hand offs have been a challenge but the advances made by wi-fi and wimax vendors in the last year are encouraging.
Analysis
Most spectrum isn't free and none of it limitless. It's just like real estate and even though there are homesteading opportunities it's good to keep the real estate analogy in mind.
I agree with the others commenting on this article that technologies such as EVDO and HSDPA present greater ubiquity in coverage area and that the pricing is coming down to a palatable level although I don't think we're quite there yet on the right pricing. The value of a carrier however relies mostly on their ability to acquire and keep profitable customers. Keeping a customer involves a number of expenses including: Billing, Care Costs, Handset Upgrade, Network, Bad Debt, etc. If we use an industry average of $26.50 per month in CCPU the largest component is network. In fact $10.25 of the $26.50 is attributed to network but of the $10.25 most of the cost is attributed to physical network rather than spectrum.
Wi-Fi technologies offered by carriers could be used to benefit customers by providing them with unlimited usage from their home, their office, and hotspots such as Starbucks and hotels. It can also offer customers improved coverage or even coverage where they previous had none. For carriers it could free up bandwidth and trunking while at the same time giving the first carriers to market a real chance to steal market share.
