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March 30, 2004

SBC Unwires UPS Stores with Wayport's Help

By Glenn Fleishman

SBC’s first Wi-Fi hotspot push yields thousands of popular locations, affirms Wayport’s model for their future: Those of us who track the Wi-Fi hotspot industry have been waiting to see how SBC’s FreedomLink Wi-Fi service would express itself, knowing only that Wayport’s network would form its early core and that Wayport would be involved in providing managed services for the hotspot build-out.

Today’s announcement that SBC will unwire the UPS Store affirms SBC’s goal of 6,000 locations within three years and Wayport’s plans to extend beyond their core network of hotels and core business of providing end-to-end service.

The UPS Store is a franchise operation with 3,300 locations, some still branded with their pre-UPS moniker of Mailboxes Etc. (Individual owners could chose to the new branding or not; new store are all called The UPS Store). 1,500 of these locations will have Wi-Fi by year’s end, and more than 3,300 through 2005. The stores are expanding rapidly with 5,000 outlets projected by 2007.

Of all the chain locations that have provided Wi-Fi service to date, The UPS Store arrangement is one of the most logical. You already have businesspeople coming to the store in large numbers. There are no children throwing milkshakes, nor the constant loud ssssss of lattes.

Yesterday, I reiterated my point that Wi-Fi service’s unlimited monthly sweet spot was $20. Today, SBC says that their unlimited usage plan is $19.95; their day rate $7.95. FreedomLink will include Wayport’s locations, but other roaming deals aren’t yet known. SBC could wield a T-Mobile-sized network, giving them the leverage to finally crack national unlimited no-extra-fee roaming.

As a Cingular cellular customer and with Cingular’s purchase of AT&T Wireless, I remain highly interested in seeing how SBC—with 60 percent ownership of Cingular—rolls out any Wi-Fi plan to their cell partner.

This UPS Store deal also marks Wayport’s entrance into the next stage of their business. Sky Dayton defined new layers to the industry in Dec. 2001 when Boingo Wireless became the first Wi-Fi-only service aggregator by stating then—as he does now—that venues, infrastructure, aggregation, and branding are all separate businesses.

This deal marks the real culmination of that layered model, more so than Cometa’s plan. Cometa is an outside in operator, formulating where they want to go and what they want to do, then finding partners. Wayport is operating inside out, with a partner that solicited bids and chose them to provide the infrastructure service. This isn’t on spec, like Cometa’s city-by-city plan. (Cometa’s Barnes & Noble network is much more conventional, but we don’t know who is paying for that build out.)

Wayport’s relationship with SBC will allow them to become a much stronger infrastructure builder providing recurring management revenue with much less cost, better spreading their expenses across a larger operation.

Posted by Glennf at March 30, 2004 7:31 AM

Categories: Hot Spot

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