AT&T is reportedly grounding plans for an LTE-based in-flight mobile broadband offering, citing plans to conserve cash related to its recent international expansion plans.
As first reported by Runway Girl Network, AT&T said it would no longer be pursuing its previously announced offering that would have provided high-speed, air-to-ground broadband services targeting the airline industry. That market is currently dominated by Gogo, which claims its equipment has been installed on more than 2,000 commercial aircraft and more than 6,200 business aircraft.
AT&T had initially said the in-flight service would use equipment from Honeywell and allow customers to access the LTE-based backhaul service using Wi-Fi enabled devices.
“After a thorough review of our investment portfolio, the company decided to no longer pursue entry into the in-flight connectivity industry,” AT&T told RGN. “We are focusing our capital on transformative investments, such as international and video.”
AT&T late last week announced plans to acquire Mexican mobile operator Iusacell for $2.5 billion.
–Speaking of AT&T’s expansion plans, a report from consulting firm The Besen Group predicts that the carrier’s move into the Mexican market could trigger the a reverse reaction from América Móvil, which is currently the largest mobile operator in Mexico.
The Besen Group said América Móvil “will make an offer to buy T-Mobile US,” though no timeline was given for the move. América Móvil currently owns domestic wireless reseller Tracfone Wireless, which offers prepaid services to more than 20 million customers through various brands, including Straight Talk, Net10 and the Tracfone brand.
Rumors have been swirling around for years concerning T-Mobile US’ future, with the most heated coming this summer when many expected Sprint to put in an offer to acquire its smaller, but faster-growing rival. That move was eventually quashed as Sprint’s parent company Softbank instead decided to replace Sprint’s CEO and put on hold any plans for further consolidation. The company also cited growing government scrutiny to such a deal.
France-based telecom operator Iliad next put in an offer to acquire a controlling stake in T-Mobile US, which was shot down by parent company Deutsche Telekom claiming the offer was not substantial enough. DT has since said it would look to keep control of T-Mobile US for the foreseeable future.
T-Mobile US over the past 18 months has been the fastest-growing domestic mobile operator on the strength of its “Un-carrier” marketing messaging and aggressive pricing moves. The carrier last year closed on its acquisition of prepaid mobile operator MetroPCS and has since rapidly worked to integrate the brand into its prepaid portfolio. T-Mobile US CEO John Legere recently stated that the carrier has become the largest facilities-based prepaid provider in the country having surpassed Sprint during the third quarter.
T-Mobile US’ significant prepaid momentum could be placing additional operating pressure on Tracfone, which could be one reason for América Móvil to make a move to acquire T-Mobile US. América Móvil is also being forced to sell off some of its Mexican assets in order to comply with recently enacted regulations that forbid one entity from dominating the Mexico market. That sell-off could provide the carrier with the financial bolstering needed to make a play for T-Mobile US.
–Ireland-based Cubic Telecom said it has signed a global agreement with China Unicom to provide machine-to-machine solutions to enterprise customers across China and Hong Kong.
The deal calls for China Unicom to use “key elements” of Cubic Telecom’s Global Cloud Platform, including its enterprise mobile management offering, real-time billing and rating engine, APIs and over-the-air capabilities.
–Internationally focused mobile virtual network operator Ultra Mobile announced new distribution agreements with Target, Dollar General and Barnes & Noble College. The deal will see those retailers sell and activate Ultra Mobile’s SIM-based prepaid service plans.
Ultra Mobile explained that the agreement will initially target specific retail locations that match up with the company’s target demographic.
“For example, Ultra Mobile plans to reach foreign exchange students by having a presence in college bookstores via Barnes & Noble College,” the company said. “Similarly, Ultra Mobile plans to place in-language marketing materials and packaging in the retailers’ outlets with significant local populations of Spanish- or Chinese-speaking customers.”
Additional carrier news can be found on the RCR Wireless News “Carriers” page.
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