AT&T Launching In-Flight Wireless Access to Challenge Gogo

Apr 28, 2014 5:00 pm

Skift Take

This will likely provide airlines with leverage over Gogo pricing, but it will take a great deal of investment and a long lead time before flyers connect using AT&T’s new solution.

— Jason Clampet

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Carlo Allegri  / Reuters

People use their smart devices on an American Airlines airplane, which is equipped with Gogo Inflight Internet service. Carlo Allegri / Reuters

AT&T Inc., the second-biggest U.S. mobile-phone carrier, will introduce 4G LTE wireless Internet access on commercial flights, mounting a challenge to Wi-Fi provider Gogo Inc.

With help from Honeywell International Inc., AT&T will begin offering the service as soon as late 2015 for in-flight Internet connections and entertainment, as well as for cockpit communications, according to a statement today. The 4G LTE technology it will use on board is the same standard AT&T employs for its fastest mobile-phone network.

The company is seeking to tap into growing demand for reliable Internet access on planes as more passengers bring digital devices, such as tablets and e-books, to pass the time during flights. That’s a market that Itasca, Illinois-based Gogo has tried to corner, offering broadband service on more than 2,000 commercial aircraft and more than 2,000 business jets.

AT&T would be the first provider of 4G LTE on planes, said Roger Entner, an analyst with Recon Analytics in Dedham, Massachusetts.

“The service could potentially be faster, since you don’t have to bounce up to a satellite,” he said.
GOGO Chart

GOGO data by YCharts

Shares of Gogo dropped 22 percent to $14.38 in late trading after Dallas-based AT&T announced its agreement. AT&T was little changed at $35.08.

To contact the reporter on this story: Scott Moritz in New York at smoritz6@bloomberg.net. To contact the editors responsible for this story: Sarah Rabil at srabil@bloomberg.net.

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