Saturday, November 08, 2008

AT&T buys Wayport

AT&T to buy Wi-Fi hot spot provider for $275M

With Wayport acquisition, AT&T says it can reduce Wi-Fi costs, provide more content and advertising to users

AT&T Inc. announced today it has agreed to buy private Wi-Fi hot spot provider Wayport Inc. for about $275 million in cash.

Austin-based Wayport had already been providing back-office management for AT&T hot spots in many restaurants and other locations, but now all of Wayport's assets and infrastructure will be owned by AT&T, spokeswoman Jenny Bridges said in an interview.

The purchase, expected to be finalized later this year, brings the number of AT&T hot spots in the U.S. to 20,000, up from 17,000, the spokeswoman said. Many of the hot spots are in McDonald's restaurants and Starbucks coffee shops, but the total now includes a variety of hotels and health care facilities.

The purchase capitalizes on AT&T's long-held strategy of providing both wide-area and Wi-Fi wireless connections to business and consumer customers. "One mode complements the other, giving near-ubiquitous Internet access for businesses and consumers," Bridges said.

The purchase "clearly" makes AT&T the domestic Wi-Fi leader and also supports AT&T's iPhone strategy, said Phillip Redman, an analyst at Gartner Inc. "It makes sense looking at multiple technologies to provide the best coverage."

Wi-Fi signals are generally much faster, as much as 10 times faster, than cellular network speeds. They also operate indoors better than cellular signals, analysts and Wayport officials said.

AT&T offers free Wi-Fi connections to some of its smart phone customers, including those with iPhones and its BlackBerry Bold, which went on sale this week. Customers of AT&T's LaptopConnect data network and its high-speed Internet on the U-verse service also get free Wi-Fi.

John Stankey, CEO of AT&T Operations, an AT&T business unit, said the Wayport purchase makes sense with the "exponential growth" of Wi-Fi equipped devices. About 300 million Wi-Fi-equipped devices shipped in 2007, while 1 billion should be on the market in 2012, according to research from In-Stat supplied by AT&T.

Bridges said that acquiring Wayport will reduce operating costs for AT&T in running Wi-Fi, as well as for businesses that want to offer it to their customers. She said that managing the infrastructure will make it easier for AT&T to increase revenues with more custom content, messaging and advertising on Wi-Fi-enabled Web pages.

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