Back in April, AT&T managed to create a stir in the in-flight wireless market by announcing that it would launch an in-flight Wi-Fi system in a number of airlines starting next year. At that time, the carrier said that it would transform airborne connectivity. Naturally as a result of the announcement, the shares of Gogo, the specialist in-flight wireless provider fell for a brief period.
However, looks like the country’s second largest carrier is having second thoughts. AT&T recently announced that it is going to scrap the in-flight Wi-Fi plans and aims to focus on other transformative investments for its capital.
The news is kind of disappointing given that it could have revolutionized the in-flight Wi-Fi industry and consumers could have benefitted from a new player in the market. The industry is currently served by specialist companies like Gogo, which although expanding every year provide slower speeds than regular broadband and wireless networks.
Gogo relies on slower 3G networks and practically, the network is not very reliable. So, even with a Wi-Fi connection, anything more than checking your emails is quite difficult. Moreover, Gogo has been increasingly becoming expensive every year, which makes things even worse.
Although back in April, AT&T didn’t reveal the speeds that the consumer would have got once its in-flight services were launched, the carrier did say that it would use ground to air 4G LTE networks which would
enable users to browse the internet, check emails and social networking websites etc. The system would work on AT&T’s existing 4G radio spectrum which could have provided great speeds.
But now, with AT&T out of the picture, Gogo remains the world leader in this industry. Gogo shares even rose since the announcement yesterday by $1.76 to $18.40 i.e. by almost 11%.
“Last week we announced our intent to acquire Iusacell, a wireless company in Mexico. At the same time, and after a thorough review of our investment portfolio, the company decided to no longer pursue entry into the in-flight connectivity industry. We are focusing our capital on transformative investments, such as our Iusacell and DIRECTV deals,” an AT&T representative said in a statement.
On the other hand, Gogo is busy developing newer technologies to improve speeds and reliability of their service in the air. The company said earlier that the new tech will increase the current speeds to 70 Mbps and up to 100Mbps in the next few years.
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