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.”

Related Links:
> AT&T Launching In-Flight Wireless Access to Challenge Gogo
> Gogo Shares Plunge More Than 20% After AT&T Announces In-Flight Wi-Fi Plans
> How AT&T Plans to Beat Gogo at the In-Flight Wi-Fi Game

The 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 is up 5.8 percent to $17.60 at 2 p.m. New York time, reversing earlier declines.

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 John Lear.

Photo Credit: According to Honeywell, "New 4G LTE-based service to meet passengers’ online demand and help make the 'Connected Aircraft' a reality." Honeywell