SBC unveils ambitious Wi-Fi plan

SBC kept the world waiting for months before unveiling its Wi-Fi strategy, but ultimately came up with an eye-popping plan targeting businesses, traveling business users and consumers.

The RBOC will deploy more than 20,000 hot spots in about 6000 locations by the end of 2006, including about 1000 by the end of this year. It plans to launch its Wi-Fi service, branded FreedomLink, this fall. Moreover, SBC will team up with Cingular Wireless, its mobile joint venture with BellSouth, to create an integrated Wi-Fi and 3G wireless service to debut in late 2004 or early 2005. SBC’s aim with the Cingular partnership is to present customers using both the Wi-Fi service and Cingular’s mobile data service with a common interface and user experience, said Lauren McCadney, assistant vice president of Wi-Fi services at SBC.

In addition to its own hot spot build-out and effort with Cingular, SBC, like other carriers before it, has established a Wi-Fi roaming agreement with fellow Texas firm Wayport. Wayport established Wi-Fi hot spots in more than 600 hotels, airports and McDonald’s restaurants give SBC a foundation of public Wi-Fi access locations that it can build on. SBC also plans to make roaming agreements with other Wi-Fi service providers, but is interested in snaring more than just the business travelers it’s likely to win with these agreements.

“Wayport has established Wi-Fi in many desirable locations,” McCadney said. “It’s a starting point for us. But, they haven’t touched every location out there, and we see Wi-Fi as a mass market offering.”

She added that SBC will use existing network infrastructure as much as possible to build out Wi-Fi coverage. That means integrating Wi-Fi access point technology with its public payphone locations, as well as using deployed T-1 and DSL facilities to transport data traffic to and from hot spots.

As it builds toward its 20,000-hot spot goal, SBC will first construct coverage in common business user destinations such as hotels, but also is talking to owners of restaurants, gas stations and other businesses about becoming destinations on its ambitious Wi-Fi map. McCadney said SBC arrived at 20,000 as its strategic goal for hot spot deployment after conducting market research to figure out where users wanted to access Wi-Fi, how many coverage sectors were needed to provide adequate access in an individual market and how accepting potential venue owners were of SBC’s plan.

McCadney said venue owners liked SBC’s strategy in art because “they have been burned by less reputable hot spot companies before. They said they saw an RBOC as the type of company most logical to deal with in this space.”

SBC will use wireless LAN equipment from a variety of vendors as it expands its coverage. The company already re-sells Wi-Fi gear from Cisco Systems and 3Com as part of an existing service offering turnkey wireless LAN deployment to small businesses.

In regard to the combined offering with Cingular, the two companies are working on a solution to allow roaming between home and office wireless LANs, public Wi-Fi hot spots and the Cingular GPRS/EDGE network. Users could experience speeds between 2 and 5 Mb/s between access points and their Wi-Fi-enabled devices on the SBC FreedomLink Wi-Fi network and up to 170 kb/s on Cingular's EDGE network.

McCadney said SBC and Cingular are currently in talks with several vendors to supply customer-facing integrated access menus and billing, as well as integrated 3G/Wi-Fi user devices. “The key with devices is that they will have to be widely available and priced for the mass market,” she said.

As SBC and Cingular move toward their combined offering, SBC plans to accelerate its hot spot construction pace next year. It aims to build more than 9000 hot spots in 2000 venues by the end of 2004. The company also will continue deploying hot spots after meeting the 20,000 hot spot/6000 venue target in 2006.

SBC is remaining quiet for now about pricing for FreedomLink, before the service launches this fall. The RBOC said it initially will charge a one-time fee for daily access sessions. However, it also plans to launch a subscription service for unlimited monthly access, along with promotional discounts for business and consumer DSL users. It will use FreedomLink as a hook for other SBC services and packages, providing discounts on FreedomLink for those who combine the service with offerings such as SBC Yahoo! DSL and the SBC Total Connections bundled service.

"Adding Wi-Fi to the SBC service portfolio will make our bundling strategy even more powerful and successful," said Ray Wilkins, president, SBC marketing and sales. "The FreedomLink service will generate incremental revenue and significantly improve our ability to attract and retain customers, and the pricing will reflect our bundling strategy - the more customers spend with us, the more they will save."

Going beyond the efforts of carriers aiming primarily for the business traveler market, SBC sees great potential in its own fixed broadband customer base of 2.8 million DSL subscribers. Targeting the existing SBC customer base will lower acquisition costs and speed Wi-Fi adoption, according to Wilkins.

As with the small business market, SBC already re-sells Wi-Fi products to many of these customers.

"We're currently selling 2000 home Wi-Fi gateways a day," said Wilkins. "Our aggressive efforts to enable SBC Yahoo! DSL and enterprise customers to enjoy the benefits of wireless broadband access have paved the way for the FreedomLink service."