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AT&T: Winning With Carrier Wi-Fi

Light Reading
News Analysis
Light Reading
12/21/2012
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If you want to see an example of how one U.S. operator has made Wi-Fi a successful part of its business, take a look at AT&T Inc.

The 2008 acquisition of Wayport gave it access to 20,000 hot spots in the U.S. and 80,000 worldwide. It now manages more than 31,000 AT&T-branded hot spots and provides access to more than 340,000 hot spots globally through roaming agreements.

More hot spots mean more traffic. In 2008, it took the entire year for AT&T to reach 20 million data connections. In 2009, it took about six months to hit that mark and, by 2010, it took just five weeks to reach that 20 million mark. In 2012, "we reached 20 million in four days," said Josh Goodell, AVP, AT&T Wi-Fi Services.

Goodell describes two distinct business segments for AT&T's Wi-Fi. One is the consumer segment, where it's presented as free as part of basic smartphone/tablet data plans. The other segment is venue services -- the airports, restaurants, retail stores and other establishments that contract with AT&T for the service.

In early 2012, AT&T finalized the acquisition of SuperClick, which specializes in delivering Wi-Fi to the high-end hospitality space. In the hospitality industry alone, AT&T delivers Wi-Fi to more than 4,000 hotels and 600,000 guest rooms.

"This is a business we take very seriously," Goodell said. "Our Wi-Fi is really an extension of the macro cellular and broadband networks."

Balancing act
With such expansive Wi-Fi and cellular networks, AT&T has to be sure one business doesn't eat into the potential earnings of the other.

"It is a balancing act," he said. "We are an extension of the wireless network, and we work in close partnership with our RAN teams." In fact, rather than keeping the Wi-Fi group separate from the distributed antenna systems (DAS) group, the two routinely go to sites together to assess the needs. "I don't see them (DAS) as competing," he said. "When we go to approach a stadium, we go from a DAS and a Wi-Fi perspective," which is paramount considering the demands that are being put on the networks there.

Stadiums may be where AT&T runs into its nearest rival. Stadiums are about the only place that Verizon Wireless executives have publicly stated they're interested in using Wi-Fi more aggressively. The reigning king of LTE coverage has not expressed much interest in investing in Wi-Fi at the network level -- at least, not yet.

Last spring, the NFL expressed its desire to put Wi-Fi in all NFL stadiums. Those types of complicated negotiations are under way with many sports leagues and are likely to continue for the next 12-24 months, Goodell said.

The demand certainly is there. At AT&T Park in San Francisco, data volume increased exponentially between the World Series in 2010 and the same event in 2012. Rather than mostly downloads like years gone by, the traffic now is a mixture of both downloads and uploads as more people update their Facebook status with pictures and video and send email photos to friends.

Here, there and everywhere
Wi-Fi also enables some new applications, Goodell said. At the Xcel Energy Center in St. Paul, Minnesota, sports fans can order food from their seats rather than standing in line. At the Fernbank Museum of Natural History in Atlanta, a collaboration with Cisco means museum visitors can get exhibit information on their smartphones and tablets based on where they are on the museum grounds. Saks Fifth Avenue customers can access a store-specific app.

Venues are pursuing different models to pay for the service as well. Some hotels offer tiered service, so a basic service is free, but if you want faster speeds, you pay for it. Some offer ads for access, and users can watch a brief ad in exchange for access.

A lot of locales see Wi-Fi as an amenity they have to offer their customers. "Consumers are more and more expecting to go online everywhere," said Roger Entner, founder of Recon Analytics. "It’s almost turning into a civil right."

— Monica Alleven, special to Light Reading

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