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Cometa's Hotspot Hassles

Cometa Networks Inc. -- the ambitious hotspot project backed by some of the biggest names in the industry -- is falling well short of its projected targets for installing 802.11 wireless LAN access points in major cities across the U.S.

AT&T Corp. (NYSE: T), IBM Global Services, and Intel Corp. (Nasdaq: INTC) with venture capital from Apax Partners and 3i Group plc, originally launched in December 2002 it talked about installing between 25,000 and 50,000 access points in restaurants, cafes, hotels and other retail outlets across the country by the end of this year (see Rainbow Unveiled)

But seven months into 2003 the company has installed very few of these hotspots -- the company says it has 10 live sites in McDonalds restaurants and has "deployed additional sites that have not been announced."

Cometa refutes suggestions that the venture is falling behind schedule. "There is no delay in Cometa's plan," writes a spokesperson in an email reply to questions. "We will be making announcements of sites on a rolling schedule over the Q3 and Q4 period." However, analysts say that the company is not meeting its original rollout schedule.

"Clearly they have not executed on [the original plans]," says Meta Group Inc.'s Chris Kozup, noting that the San Francisco-based company "didn't even bid" on the contract to run a public WLAN service in the international airport in its hometown, a site now operated by T-Mobile USA.

I don't know the exact number [of hotspots installed] but I know it's not very many," says Yankee Group's Sarah Kim. "I think the number that they first announced was a little aggressive."

So what's taking Cometa so long to get up and running?

According to an executive from a wireless operating support systems (OSS) startup who didn't want to be named, the companies involved in the project have been at loggerheads over the best way to install and manage hotspot sites. IBM Global Services, which is nominally the partner tasked with setting up these sites, had wanted to build a management system from scratch. However, the other partners nixed this suggestion as too expensive and are now searching for off-the-shelf software to handle management and billing tasks.

Yankee's Kim thinks that possible delays with Cometa's rollout can only benefit operators like T-Mobile, which already has 2,000 WLAN sites around the U.S. The more time it takes Cometa to roll out a network, the fewer prime sites (airports, hotels, brothels -- the usual suspects) there will be available for it to plant hotspots on. "The longer it takes other players to get moving, the more it becomes a question of a lockout," says Kim. "T-Mobile has the first-mover advantage."

— Dan Jones, Senior Editor, Unstrung

wap545 12/4/2012 | 11:47:40 PM
re: Cometa's Hotspot Hassles It amazes me that the analysts are suprised at this.
Since when has a consortium like this, in an emerging industry, that has not even had its components and services clearly defined hope to succeed?
The business case for the HotSpot itself is a non starter, unless one owns the last mile broadband loop. The same things killed the CLEC market a few years back and continues today.

When the local loop or last mile providers (ILEC & RBOCS or new WirelessLECs) elect to get into this space they will team with one or multiple carriers (WiFi is agnostic) and deploy a true Broadband (1-3Mbps/Sub) network in Niche markets segments. The key for them is that they can use this same infrastructure to sell services to their existing DSL/Cable Modem and new Enterprise subscribers.
The new radio/switches and smart antennas coming out now will allow a real world cost effective deployment of standards based 802.11b & g based services in a 100 degree sector out 1-2 miles from Base. Key to this success (cost effectiveness)will be the Wireless Systems that allow subscribers to use off the shelf standards based PCMCIA, Compact Flash and NIC cards and roam between the carriers (GPRS/CDMA) networks and the WLAN.
The ILEC and RBOC can also use this technology to penetrate and replace the MSO market for Broadband Services with minimal investement in last mile hardware.
Keep in mind that any Wireless deployment effectively eliminates the single biggest cost of deploying any WIRELINE (DLC/DSLAM)system and that is the recurring monthly cost (overhead) of supporting/replacing/powering the Last Mile electronics.
This will be the reasons the RBOC eventually get into this space because if they7 don not the new WirelessLEC will do this and use the RBOCs Core and Edge services to do it.

Jim

shibaraku_desu 12/4/2012 | 11:47:24 PM
re: Cometa's Hotspot Hassles Is anyone seriously in doubt that Cometa would fail to meet any or all of the commitments made?

The previous Brilliant venture (Softnetzone) business model was based where the intrinsic company value was in the subscriber relationship.

Now Brilliant has gone b2c with Cometa where the value is in the network footprint. But unfortunately the footprint has largely gone. I find the restaurant and cafe model hard to believe and the hotels and airports are already under contract to other providers.

Watch for a lot more money to follow the c. 60m that SoftNet spent.
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