« Wi-Fi/Cellular PDA to Arrive Later this Summer | Main | NY Times Looks at AirPort Wi-Fi »

July 26, 2004

SBC is Hotspot Hero?

By Glenn Fleishman

They’re late to the game, but they’re ready to party: It’s a funny thing. When SBC Communications first announced their FreedomLink plans last year with plans build 6,000 hotspots over a couple of years, it seemed like yet another announcement of large numbers with no track record. Cometa was still on its 20,000 hotspots prediction and had only a handful. McDonald’s hadn’t decided its partner and was in limited trials. Wayport seemed stuck on hotels. And T-Mobile stayed focused—as it still does—on a few ubiquitous chains.

In the space of a few months, SBC has moved from last man in, to practically first mover. Let’s review:

• The UPS Store. They will install Wi-Fi in thousands of UPS Store outlets, which are places that business people already congregate. This will probably also necessitate a change of thinking for that mailing and business operation so that they can make it easier for people to work for periods of time in their stores.
• Wayport managed services. They hired Wayport to build out their FreedomLink locations instead of creating a new division with no experience in house.
• Wayport’s Wi-Fi World and McDonald’s. They’re the first telco to sign up to resell Wayport’s McDonald’s network, which will ultimately be several thousand stores over the next couple of years.
• Wayport/McDonald’s supplier. They’re also providing DSL and other connectivity to many of the McDonald’s that Wayport is disconnected, which is part revenue, part branding for them as part of the Wi-Fi World co-marketing model Wayport is pursuing.
• Airports, airports, airports. They have roaming agreements now for their FreedomLink users onto Concourse, Wise, Wayport, and (reportedly) Sprint PCS’s airport locations. There are only a handful of major airports not represented by those networks: SFO and Boston Logan are the two that come to mind.
• Pushing Wi-Fi into homes. SBC is selling 3,000 Wi-Fi routers a day to their home DSL users. This will drive adoption by their users of Wi-Fi. People without Wi-Fi will buy adapters or new systems because of the ease of sharing.
• Pushing hotspots subscriptions to their DSL subscribers. It’s a coming, and it’s going to be good—SBC keeps saying in its press releases that they will offer FreedomLink at a substantial discount to their DSL subscribers. $10 per month for unlimited use? $8? $15? Who knows. But it’s an audience they’ve already got and they can offer them nationwide service with several thousand locations from this fall with firm commitments to increase to at least 15,000 in their roaming network within 12 to 18 months.
• Cingular. Let’s not forget the fact that SBC is 60 percent owner of Cingular, which is in the process of purchasing AT&T Wireless, which just rolled out UMTS (W-CDMA) third-generation cellular data in four cities. Cingular itself plans to follow by 2006, although perhaps the pace will increase with the new frequency harmonization the two merged companies can do. Last year, SBC said they’d start working on selling Wi-Fi to CIngular subscribers in 2005. We’ll see if that holds true.

SBC has not so quietly assembled what will be the largest roaming network with a flat-rate price in about two to three months from now and then grow much larger than any other network in the U.S. They’ve set a good price. They have bundling deals yet to come. And they cover plenty of business territory with hotels, airports, and other venues.

Could it be that SBC drives other telcos into reselling and building Wi-Fi on a scale that’s only been hyped before now? Or will SBC’s drive be a strategy they follow alone, leaving T-Mobile with its private network (resold only to iPass), and aggregators like Boingo selling all the pieces outside of Wayport’s retail Wi-Fi World locations and SBC’s FreedomLink exclusive venues?

The test of whether a build out will happen is whether the money and commitment is there. Cometa had the commitment, not the money. Ditto, MobileStar. T-Mobile had both and has built out everything they promised when they formally launched Starbucks networks. We’ll see if SBC follows suit, but there’s no denying that they throw the cash around when it has this many positive strategic implications for them to retain customers, receive incremental revenue from existing customers, and provide a long-term data and voice game plan for them.

Posted by Glennf at July 26, 2004 9:36 AM

Categories: Hot Spot, Vendor analysis

Trackback Pings

TrackBack URL for this entry:
https://db.isbn.nu/mt3/mt-tb.pl/2315

Comments