Phone Companies And Internet Providers Are Switching Places?
Phone companies and internet providers are having somewhat of an identity crisis and are looking to switch places.
At the beginning of the 21st century, internet providers and phone companies were two distinct businesses. One offered you WiFi and related services for the computer, while the other focused on cell service and family plans. With new 5G availability, affordable deals, and high-tech smartphones, phone companies are becoming a unique alternative to expensive internet services.
Wireless carriers have recently tapped into internet-service providers for extra business. Those who have been using internet providers may need something more elevated than traditional broadband. Phone companies are also administering cheaper plans but with significant WiFi advantages, enticing many looking to carve down their monthly bills. As inflation continues to jack up gas, food, and transportation prices, many are investing in cheaper phone plans to provide internet-adjacent functions.
Inflation has played a significant role in the costly nature of internet providers in 2022. In June, the US inflation rate hit a record high of 9.1%, the fastest-rising rate since 1981. This exponentially increased the prices of everyday goods and services, including the internet. An internet service’s average price rose by 1.7% in June since 2021, forcing many to abandon their WiFi and modem. Now, customers are looking at phone companies to provide less expensive internet functions while the economic situation continues to burden average Americans.
Phone companies like Verizon and T-Mobile received a monumental subscriber increase throughout the last several months. Due to the priciness of current internet providers, both companies signed on 2.2 million subscribers for wireless-internet services. Instead of using traditional broadband, smartphones are able to beam signals from cell towers into the resident’s space through a router. This has replaced the need for separate modems from internet companies since a phone provider can give a two-for-one service for a cheaper amount. Broadband companies are now struggling to compete with phone companies with better signals for lower monetary rates.
The success of wireless carriers this year has tanked cable and broadband companies nationwide. Comcast experienced a subscriber loss this past month for the first time in the company’s history. Though Comcast was taking off during the pandemic due to people wanting cable during quarantine, inflation has deterred many from keeping their subscriptions. Other cable companies like Charter Companies also experienced a subscriber decline. Internet providers are plummeting similarly since customers are figuring out new ways to save money while still receiving quality WiFi services.
Comcast CEO Brian Roberts isn’t discouraged by the recent consumer change. Roberts said he expects customers shifting toward wireless carriers for the internet will slow down eventually. This is because phone companies can only add a limited number of customers to their internet services. Still, phone companies consistently document the number of internet subscribers they’ve received from former broadband users. T-Mobile stated that almost half of its new 560,000 subscribers in the second financial quarter came from customers ditching their cable bills.
Broadband and internet providers have been struggling throughout this year. As customers look for better deals amidst heightened costs, phone companies will undoubtedly continue beating out their competitors.
