AT&T's quarterly update on Wi-Fi sessions fails to mention that most of its locations have free or nearly-free service now: AT&T has very nicely released statistics on the use of its "20,000+" hotspots for some time. It's handy for those of us who write about the business to get some concrete numbers. In the first quarter of 2010, usage was almost 500 percent higher than the year-ago quarter: 53m sessions in all.
But the press release mentions only half of the reason for this increase, in my estimation; more data might belie that. McDonald's switched from a modest for-fee model ($3 for two hours) to fully fee-free in January 2010. This was well advertised, and I can't help but believe it's part of the push. As I wrote in January, "These numbers will completely explode in 2010 Q1, I predict."
At the same time, Starbucks switched from its complicated usage plan for stored-value card owners to far simpler model. In the old system, which aged out in December 2009, you received 30 days of usage (two consecutive hours per day limit) after each purchase or value addition to the card. The company initially announced a change that would keep that limit and add a minimum initial state in which five purchases were needed before activation of the free offer.
But the company got smart and made it simpler. Now, any Starbucks card holder who has made any purchase or loaded value can register the card and get free two-hour-a-day service indefinitely.
Starbucks and McDonald's represent somewhere north of 18,000 of the more than 20,000 hotspots in the network. Neither firm is mentioned in the press release, nor does the word "free" appear. Barnes & Noble's 700+ locations with free Wi-Fi provided by AT&T is also omitted.
I don't mean to be hard on AT&T about this; it's actually a marvelous thing that its major two venue partners wanted to make Wi-Fi more freely available. But it also simultaneously reduces the benefit of an AT&T subscription or service if you can get most of the network for free. Airports, hotels, and other premium locations remain for-fee.
Of course, the other big factor is the continuing increase in users who qualify for free access on all domestic locations as an add-on. In the fourth quarter of 2009, AT&T had 27m qualifying DSL, fiber, remote business, and smartphone subscribers. Three months later, that number is 32m. The vast portion of those subscribers are likely new iPhone purchasers, given that the company is bringing more customers over to that phone from other carriers or other phones; the company said broadband and laptop card subscribers increased only 278,000 to 17.5m, which means that they added nearly 5m wireless subscribers to this pool.
As the company noted in the press release, 69 percent of connections in the last quarter came from smartphones and what it describes as "other integrated devices" (I'm not sure what that category is and it's not defined--the B&N Nook?), up from 35 percent in the same quarter in 2009.