AT&T is no longer planning to compete with Gogo, Global Eagle and others in the in-flight connectivity industry. The nation’s second largest wireless provider has offially grounded plans to build a new air-to-ground network that would have provided airline passengers with speedy in-flight Wi-Fi service.
In a statement on the matter, an AT&T representative said that after a thorough review of their investment portfolio, they’ve decided to no longer pursue entry into the in-flight connectivity industry. AT&T will instead focus their capital on transformative investments such as their DirecTV and Iuseacell deals.
If you recall, AT&T agreed to acquire DirecTV this past May in a stock-and-cash deal valued at $48.5 billion.
Just days ago, AT&T said it would purchase Mexican wireless company Iuseacell for $2.5 billion. That deal includes all of Iuseacell’s wireless properties, licenses, network assets, retail stores and the provider’s roughly 8.6 million subscribers.
AT&T first revealed plans to offer in-flight Internet service in late April with the intent to launch its service by the end of 2015. They’re likely one of the few companies that could have made a serious run at in-flight Wi-Fi as they have the experience and spectrum to do so.
What’s more, AT&T could have offered incentives or other discounts to existing customers to encourage them to purchase in-flight Wi-Fi. Considering that only six percent of passengers opt to buy Gogo’s in-flight service, there’s still room for another competitor to make a move.