AT&T Abandons Plans for In-Flight Wireless Service (Updated)

AT&T is abandoning an in-flight wireless initiative that would have positioned it to compete with services such as Gogo.

The nation’s second-largest wireless carrier had announced plans this spring to bring high-speed 4G LTE wireless service to flights as soon as next year through a partnership with Honeywell.

At the time, AT&T described the skies as full of opportunity — noting that nine out of 10 customers surveyed by Honeywell expressed frustrations with in-flight Wi-Fi, including inconsistent or slow connections. The carrier touted that its technological know-how and deftness at building and managing networks would allow it to provide better quality service.

“We expect this service to transform connectivity in the aviation industry — we are truly mobilizing the sky,” AT&T Chief Strategy Officer John Stankey said at the time of the announcement.

The carrier issued a statement Monday reversing course, saying it has decided to “no longer pursue entry into the inflight connectivity industry.” The news was first reported by RunwayGirl Network.

AT&T said instead it plans to devote its resources to expanding its international presence through deals including the $2.5 billion offer to acquire Iusacell, a wireless company in Mexico.

It is also focusing on “transformative investments” such as its $48.5 billion plan to acquire DirecTV, which would allow AT&T to offer consumers a bundle of services that would include pay TV, broadband Internet and wireless service.

One travel industry analyst, Henry Harteveldt of Atmosphere Research, said AT&T may have discovered that many North American airlines already are locked into contracts with other in-flight broadband providers, such as Gogo and Row 44.

“I was surprised when AT&T made its announcement, simply because it’s a mature market at this point,” Harteveldt said. “And they didn’t appear to be offering anything that was tangibly different.”

AT&T’s news proved a boon for Gogo, whose stock was down roughly five percent in morning trading, after it posted a third-quarter loss of 29 cents a share that was steeper than analysts’ projections. It reported a loss of $24.9 million on record quarterly revenue of $104 million.

However, Gogo’s stock rebounded by the end of the day, closing up 10 percent on news of the rival’s exit.

Gogo Chief Executive Michael J. Small declined to comment Monday on AT&T’s decision, but issued a statement underscoring his company’s $1 billion investment in building its in-flight broadband business.

“We firmly believe that we are a leader in this space because we specialize in aviation and we’ve built a network to service the global aviation market,” Small said.

This article originally appeared on Recode.net.

Will you support Vox’s explanatory journalism?

Most news outlets make their money through advertising or subscriptions. But when it comes to what we’re trying to do at Vox, there are a couple reasons that we can't rely only on ads and subscriptions to keep the lights on.

First, advertising dollars go up and down with the economy. We often only know a few months out what our advertising revenue will be, which makes it hard to plan ahead.

Second, we’re not in the subscriptions business. Vox is here to help everyone understand the complex issues shaping the world — not just the people who can afford to pay for a subscription. We believe that’s an important part of building a more equal society. We can’t do that if we have a paywall.

That’s why we also turn to you, our readers, to help us keep Vox free. If you also believe that everyone deserves access to trusted high-quality information, will you make a gift to Vox today?

One-Time Monthly Annual

$5/month

$10/month

$25/month

$50/month

Other

$

Yes, I'll give $5/month

Yes, I'll give $5/month

We accept credit card, Apple Pay, and Google Pay. You can also contribute via