5G is coming, But it will cost you a bundle

5G wireless is coming. It's going to be much faster than 4G -- and likely way more expensive.

Before the end of the decade, wireless companies are expected to start serving up 5G technology, which promises speeds of up to 40 times faster than 4G.

With speeds that fast, you'll be able to do incredible things on your smartphone. For example, Nokia (NOK) says 5G will let people stream "8K" video in 3-D. That's an incredibly detailed picture, which is twice as clear as 4K video and 16 times clearer than full HD video.

A person with a 5G smartphone could download a 3-D movie in about 6 seconds. On 4G, it would take 6 minutes.

But with great speed comes great cost. 

A typical standard-definition streaming video that you watch on your phone uses up to 0.7 GB of data per hour, according to Netflix. An hour of 1080p HD video uses up 3 GB. 3-D video uses up 4.7 GB and 4K video uses 7 GB of data. That's more than three times the average monthly data plan, gone in a single hour.

So if you've got big dreams of having 3-D FaceTime conversations on your 5G iPhone, you'd better be prepared for a truly shocking wireless bill.

As wireless speeds have increased over the past decade, consumers' data usage has soared. Today, 4G smartphones generate nearly 10 times more traffic than non-4G devices, according to Cisco.

Cell phone bills have gotten bigger as a result.

In 2013, the average cell phone bill was $76 a month, according to the Bureau of Labor statistics. That's up 50% from the $51 a month consumers were paying in 2007, the year that the iPhone debuted. 

By 2019, Cisco (CSCO, Tech30) forecasts that mobile data traffic to and from cell towers (not offloaded to Wi-Fi) will grow by 57%. So if data plans stay the same four years down the road, the average user's smartphone bill could grow by $43 a month to $119.

Wireless analysts expect cell phone costs to come down somewhat to make 5G affordable. But if you want 5G service to cost exactly the same as your 4G plan, wireless companies would have to reduce the price of each bit of data to 1/1000 what it costs today, according to a 5G cost analysis published by the University of Bridgeport.

Though that won't happen, it's worth noting that all of the Big Four wireless companies have lowered their data rates somewhat over the past few years.

For example, Verizon cut most of its data plans by $10 a month earlier this year. AT&T (T, Tech30) slashed its 2 GB Mobile Share Value plan by $15 to $65 a month last year. T-Mobile and Sprint have also cut prices recently.

Customers have to pay up for more data, though. Verizon increased the price of its 10 GB plan by $20 to $100 a month and T-Mobile raised the price of its unlimited data plan by $10 a month last year. 

5G could usher in a world of ultra-high definition video on smartphones and a host of apps that are unimaginable today. But you'll have to pay more to take advantage of all that speed.

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Tuesday 19 May 2015