If we’re to extrapolate AT&T’s WiFi hotspot connections, we might think that WiFi is getting popular all the sudden. The company reported 10.5 million WiFi connections in the the first quarter. The company has 20,000 hotspots across the country, including a deal with Starbucks. For AT&T, this is by design. They’ve ramped up their efforts to expand business amid relative saturation. To differentiate themselves from competitors they’ve begun offering WiFi access to many of their customers. It seems to be working, as cable companies are reporting similar results.
Customers of AT&T’s DSL, U-Verse, or LaptopConnect services — as well as those with mobile WiFi devices like the iPhone — can connect to any AT&T hotspot for free. So the company isn’t really making much money on those 10.5 million connections. Instead, it’s using WiFi as an enticement to pick their services. The sell is pretty easy at that point: “Yes, you have a five gigabyte cap with your data plan, but you can connect to any of our WiFi hotspots free and get unlimited access. Does Verizon offer that?” Of course, they do not, so that’s a competitive advantage for AT&T.
WiFi also helps keep AT&T’s network at full capacity. If too many users are on the 3G network it can slow things down considerably. By offering WiFi connections AT&T is moving customers off the 3G network so it can be used by those not within WiFi range. In other words, it’s a win-win for AT&T. Expect other carriers to copy this within the year.
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