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AT&T's Hotspot High Noon

There is a distinct whiff of the Oedipal about AT&T Wireless Services Inc.'s (NYSE: AWE) announcement today that it plans to offer public access wireless LAN services in airports and hotels.

The move means that the wireless operator will now directly compete with its former parent company, AT&T Corp. (NYSE: T), which it split from in 2001, for a slice of the public wireless LAN access market in the U.S. Recently, research firm Yankee Group predicted that the public hotspot market would be making revenues of $1.63 billion by 2007 (see Yankee's Hot Spot ).

The question is, will this be a case of matricide, or are we in for a bout of baby eating?

AT&T Wireless plans to team up with business-focused WLAN service provider Wayport Inc. to offer users WLAN access at over 475 hotels and 10 airports in the U.S. (see AWE Enters Hotspot Market). Prices for the "GoPort" service will range between $10 a day for unlimited access, up to $70 a month for unlimited use.

AT&T Corp's plans are much more grandiose. Ma Bell has taken an undisclosed stake in Cometa Networks Inc., the company that plans to carpet the U.S. with between 25,000 and 50,000 hotspots over the next year (see Rainbow Unveiled).

On the face of it, Cometa's WLAN roadmap sounds far more impressive than the AT&T Wireless GoPort service. However, by teaming up with WayPort, AWE may have given itself an edge. The deal means it has a ready-made service available in airports and hotels, which are the natural habitat of the business traveler -- the deep pocketed über-user that all these service providers want to reach.

Some analysts have questioned whether Cometa has left it too late to horn in on this market, which has yet to publicly announce any rollouts. The startup will be fighting for that business against companies like T-Mobile USA, which already has around 2,000 hotspots in place (see T-Mobile: WLAN Loner), as well as Wayport and AT&T, and a host of smaller companies.

— Dan Jones, Senior Editor, Unstrung
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