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AT&T taking over the reins of WiFi business

With Wayport purchase AT&T assumes direct control over growing hotspot network and expands its exposure to the enterprise

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AT&T’s purchase of hotspot provider Wayport will only adds an additional 3000 hotspots to its already market-leading US footprint, but the deal has much more operational significance. Wayport has been the man behind the curtain running AT&T WiFi for the last three years, and by taking over its management partners AT&T takes over direct control of its 20,000-strong US hotspot network, including the thousands of Wayport-managed McDonald’s access points AT&T customers already have access to.

Aside from the McDonald’s footprint, Wayport primarily manages WiFi access points in hotels, with Wyndham, Marriot Vacation Club and Four Seasons among its clients as well as a few healthcare facilities and the hotspots at Hertz rental car agencies. AT&T became the largest hotspot provider in the country this year when it acquired T-Mobile’s network of WiFi access points in Starbucks coffee shops. When the $375-million cash acquisition of Wayport closes this quarter, AT&T WiFi will span not only hotels, coffee shops and fast food restaurants but airports, convention centers and Barnes & Noble book stores. Additional roaming agreements will give it a global reach of 60,000 hotspot locations outside of the country.

AT&T is likely keen to take over management of its of WiFi network as it becomes a more critical component of its enterprise mobility strategy, said Kathryn Weldon, enterprise mobility analyst with Current Analysis. While AT&T has made huge strides in building its 3G high-speed packet access network, there are still regions of the country where 3G doesn’t yet touch, she said. In addition, AT&T also doesn’t have a 3G presence outside of the US, which would be crucial for enterprise customers. Roaming rates overseas are very high, while WiFi is a cheap and easy alternative.

“AT&T already is a player in the global remote access services market, which is still heavily slanted toward WiFi, although 3G, dial, and hotel broadband are also offered for remote employees,” Weldon said. “This [Wayport acquisition] not only ups their hotspot count but should give them more control over the WiFi access points that are a key part of this service and of course reduces the fees they have to pay WiFi partners. I don't know what will now happen to the existing relationships that [AT&T competitors] have with Wayport, but presumably AT&T gets that revenue as well.”

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© 2009 Penton Media Inc.

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