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Summary:

Today AT&T said it would buy Wayport, an operator of Wi-Fi hotspots around the country, for $275 million in cash. The deal brings AT&T 80,000 Wi-Fi hotspots all over the country, which will help offload bandwidth-clogging traffic, driven by Wi-Fi enabled phones, from its 3G network.

att_header_logoToday AT&T said it would buy Wi-Fi hotspots operator Wayport for $275 million in cash. Not only is this an exit for the 12-year-old Irving, Texas-based company that raised more than $130 million, but it also gives AT&T 80,000 Wi-Fi hotspots all over the country world. As AT&T brings in more WiFi-enabled phones that encourage a rich web experience, those hotspots will help offload bandwidth-clogging traffic from its 3G network.

AT&T already requires iPhone users to use their Wi-Fi connection to download files from iTunes and prohibits bandwidth-intensive applications such as P2P sharing. Part of the reason for this is the limitations of its HSPA network. While fast, it isn’t designed to handle the continuous streams of data a song download or video upload requires. 3G is still designed for voice traffic, which is intermittent and much less bandwidth intensive. The network has a data overlay, but that, too, is designed for bursts of data rather than continuous streams. If too many people that require continuous streams of data get on, it clogs the network, leaving other subscribers unable to access it.

Buying Wayport and offering 20,000 hot spots (including in airports and McDonald’s restaurants) in the U.S. allows AT&T to provide its customers with more places to do their bandwidth-sucking applications. Already, AT&T is willing to let iPhone and BlackBerry users access its Wi-Fi hotspots free at Starbucks. It also means AT&T can hold out a bit longer before deploying its 4G LTE network, which is designed for data.

  1. 3G is not the problem, it is AT&T Mobility’s underprovisioned backhaul network. Upgrading the backhaul so that it actually matched the radio capacity was how AT&T magically increased the speed of their EDGE network for the original iPhone roll out. They could do the same thing with the HSPA network, but WiFi is probably a lot more cost effective.

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  2. Jesse

    I totally agree with you. These guys are in denial. If anyone who has used AT&T’s wireless network like I have in the recent months, they know how pathetic it has become here in San Francisco. I am sure other parts of the country are equally terrible. Their backhaul must be choking by now.

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  3. It always amazes me how when I travel anywhere in Europe or Asia I get almost-flawless GSM service and in most cases HSPA, while in the US there’s such poor coverage, tons of dropped calls, and terrible data throughput. The FCC is totally sleeping at the wheel!

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  4. That fix to the AT&T network is a seven billion dollar expense I hear from well placed sources. While it will likely occur, it won’t be this year. The iPhone user’s data plan revenue is what pays for it mostly.

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  5. [...] and is seemingly doing all they can to get customers connected to the web.  First up they have purchased Wayport’s 3,000 hotspots to make their hotspot collection even bigger than before and bringing their US hotspot count to [...]

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  6. [...] and is seemingly doing all they can to get customers connected to the web.  First up they have purchased Wayport’s 3,000 hotspots to make their hotspot collection even bigger than before and bringing their US hotspot count to [...]

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  7. There seems to be a figures dance, some sites reporting as much as 10k hotspots, others only 3k hotspots. In any case, the move is highly strategic – I would agree with those who say AT&T is trying to get people off their 2G/3G networks and onto WiFi for data usage. Otherwise, how do they justify a cost of $92.000 per hotspot?

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  8. [...] Stacey Higgenbotham over at GigaOm sees it as more of a move by AT&T to aleviate the load off the mobile data network than as a value add for McDonald’s customers: Buying Wayport and offering 20,000 hot spots (including in airports and McDonald’s restaurants) in the U.S. allows AT&T to provide its customers with more places to do their bandwidth-sucking applications. Already, AT&T is willing to let iPhone and BlackBerry users access its Wi-Fi hotspots free at Starbucks. It also means AT&T can hold out a bit longer before deploying its 4G LTE network, which is designed for data. [...]

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  9. [...] Stacey Higgenbotham over at GigaOm sees it as more of a move by AT&T to aleviate the load off the mobile data network than as a value add for McDonald’s customers: [...]

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  10. [...] Stacey Higgenbotham over at GigaOm sees it as more of a move by AT&T to aleviate the load off the mobile data network than as a value add for McDonald’s customers: [...]

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