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November 06, 2008

AT&T Buys Wayport

By Gary Kim, Contributing Editor

AT&T (News - Alert) is acquiring Wi-Fi network provider Wayport, adding hot spots at Wyndham, Marriott Vacation Club, and Four Seasons hotels, as well as health care facilities, HealthSouth and Sun Healthcare.



 
AT&T will also find itself serving Wi-Fi at McDonald's restaurants via the deal, adding to AT&T's presence at Starbucks coffee shops.
With the acquisition, AT&T will increase its total Wi-Fi network to about 80,000 locations worldwide, 20,000 of which will be in the United States.
 
So what is the business model for Wi-Fi? Think 3G Apple (News - Alert) iPhones and other smart phones that have Wi-Fi capability.
 
"We're seeing exponential growth of Wi-Fi enabled devices, such as smart phones, combined with a continued dependency on 24-7, anytime, anywhere Internet access across business and consumer market segments," says John Stankey, AT&T chief executive of operations.
 
AT&T Apple iPhone (News - Alert) users will get free Wi-Fi access at all of its hot-spot locations, so the new footprint will help increase coverage, further offload broadband traffic from the mobile network. The challenge for public Wi-Fi all along has been the business model. Some, such as Cablevision, offer Wi-Fi as an amenity of its broadband access service.
 
In AT&T's case, the immediate business model is iPhone subscriptions. In the future, the business model will broaden to include broadband access available on a seamless basis, across the wired, wireless and now Wi-Fi footprint.
 
Up to this point, Wi-Fi hot spot providers have found the revenue model to be the key impediment. So far, the business model seems to have worked  best when offering Wi-Fi hot spot access as a feature available to broadband access customers, either fixed or mobile. That seems to be AT&T’s thinking as well.

Gary Kim (News - Alert) is a contributing editor for TMCnet. To read more of Gary's articles, please visit his columnist page.

Edited by Jessica Kostek


 







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