AT&T Cancels Plans to Offer In-Flight Wi-Fi AccessScott Moritz
AT&T Inc., the second-biggest U.S. mobile-phone carrier, is scrapping its plans to introduce 4G LTE wireless Internet access on commercial flights to conserve cash as it expands internationally.
AT&T had said in April that it would work to build a land-to-air high-speed network to serve airlines with in-flight Wi-Fi Internet access. The service, in partnership with Honeywell International Inc., was to be introduced as soon as late 2015, mounting a potential challenge to Wi-Fi provider Gogo Inc.
The effort to offer in-flight Wi-Fi is being sacrificed as AT&T trims its capital expenditure budget for next year by 14 percent to about $18 billion. AT&T reduced the forecast last week at the same time the U.S. phone company announced the $2.5 billion acquisition of Grupo Iusacell SA, as it furthers its push into Mexico.
“After a thorough review of our investment portfolio, the company decided to no longer pursue entry into the Inflight Connectivity industry,” Fletcher Cook, a spokesman for AT&T, said in an e-mailed statement. “We are focusing our capital on transformative investments, such as international and video.”
Gogo spokesman Steve Nolan declined to comment on AT&T’s decision.
Gogo has spent about $1 billion on building its business and a network to serve airlines, Chief Executive Officer Michael Small said in an e-mail. “We look forward to competing with existing competitors and anyone else who wants to get into the space,” he said.
AT&T’s decision to no longer pursue in-flight wireless Internet was first reported by the website Runway Girl Network.
After Dallas-based AT&T’s original announcement, shares of Gogo dropped 29 percent in one day on investors’ concerns about increased competition for airplane Wi-Fi services. Today, the Itasca, Illinois-based company rose 11 percent to close at $18.40 in New York.
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