November 6th, 2008

AT&T Makes Wi-Fi Play with Wayport Purchase

AT&T announced the purchase of Wayport today for $275 million in cash. See release.

First, Congratulations to the Wayport team! There were many in the industry who said that there was no money to be made in unlicensed spectrum or more specifically in public Wi-Fi. Wayport has built a large network and created an innovative business model.

What I like most about this deal is that it makes a lot of sense for consumers. Consumers simply want access to the Internet. They don’t care how so much. When it was just a few people with laptops traveling a few days a month, day use fees tied to a single device made sense. Now, however, expectations have changed. Consumers have more devices that they want to use in more places to access the Internet.

Fewer network owners will simplify this process for consumers. Already more than one quarter of online users use public Wi-Fi. As a home AT&T DSL customer, I’ve already had access to AT&T-owned hotspots for a while. I look forward to the larger footprint as I drink more coke than coffee.

The timing is good as well given the number of iPhones in the market. I look forward to the day that my iPhone doesn’t asked me six times each day if I want to connect to such and such Wi-Fi network as there are layers and layers of them here in San Francisco.

The recent announcement of free Wi-Fi on AT&T networks for iPhone customers made sense. It made more sense – at least for consumers – than simply having free access to iTunes at Starbucks. What will make more sense for consumers is using any application on any device as long as they are AT&T customers. Sure, exclusive content on a specific network and specific device is good for the business partners and benefits consumers, but those aren’t the most consumer-centric deals.

It’s been a long road for public Wi-Fi. The first launch in a McDonald’s – back before Wayport won the deal outright – was more than five years ago already. I can tell from how I look in this picture at the launch in this McD’s in downtown SF. And that’s not the latest Macbook.

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