AT&T Buys Wayport for $275M

AT&T Inc. (NYSE: T) is spending $275 million to extend its U.S. footprint of public access hotspots in the U.S. to nearly 20,000 by buying WiFi operator Wayport Inc.

The all-cash deal for a hotspot operator may seem a little unusual when you consider that AT&T and its rivals are all hoping to put wide-area wireless broadband networks in place in over the next few years. For AT&T, however, there's a simple point to the acquisition: It and other operators are shipping far more devices with WiFi installed than ever before, be it smartphones or laptops.

AT&T says that nearly 300 million WiFi-enabled devices shipped in 2007, and expects to increase that number to almost 1 billion by the end of the decade.

AT&T has already taken over the Starbucks WiFi contract from T-Mobile US Inc. . The Wayport buyout will enable it to offer free WiFi services to its cutsomers in McDonald's, as well as Marriott Vacation Club and Four Seasons hotels. Wayport also has international roaming deals in place that allow it to give customers access to around 80,000 hotspots worldwide.

Of course, one of the key WiFi enabled devices for AT&T is the Apple Inc. (Nasdaq: AAPL) iPhone. The deal will enable AT&T to extend its coverage for that particular tranche of smartphone users, too.

The deal is expected to close by the end of the year.

— Dan Jones, Site Editor, Unstrung