MCI DOUBLES WORLDWIDE WI-FI FOOTPRINT

MCI announced last week that it will nearly double its Wi-Fi hot spot coverage, both in the U.S. and abroad, a move that vaults the company into the ranks of market leaders like T-Mobile and Wayport.

Through its partnership with hot spot aggregator Boingo Wireless, MCI will expand its Wi-Fi network to about 11,000 sites worldwide by May. That includes 3400 new locations in the U.S., bringing the company's nationwide total to about 6200. According to their respective Web sites, wireless carrier T-Mobile now claims 15,187 hot spot locations worldwide, including 5429 U.S. sites, while wireless ISP Wayport says it is fast approaching 7000 U.S. locations.

MCI's current wave of expansion will focus beyond traditional hot spot sites like hotels and airports in an effort to better serve enterprise customers who still require off-site wireless access, regardless of whether they're traveling out of town or out of country.

“They're what I'm calling ‘windshield warrior-friendly’ venues, such as cafés, retail establishments, business centers and the like,” said Kevin Gatesman, senior manager of emerging technologies for MCI. “We're not only adding more coverage, but providing a little more depth in terms of the types of venues we have.”

MCI now offers Wi-Fi in 36 different countries worldwide, adding coverage in 13 new nations as part of this latest expansion (see map).

Although the move is certainly important for MCI and its subscribers, its impact on the Wi-Fi market as a whole is minimal, according to John Yunker, president and chief analyst for Byte Level Research.

“It's not going to make a huge difference, but any expansion is definitely positive for Wi-Fi supporters, vendors and users,” he said.

Instead, Yunker said the announcement is more significant for what it portends should Verizon Communications win its ongoing fight with Qwest to acquire MCI. The expansion of MCI's hot spot network could make the carrier even more of a plum purchase for Verizon, which itself has invested little in Wi-Fi over the years. If and when it takes control of MCI and its assets, for example, Verizon could conceivably begin to roll out converged services like voice-over-Wi-Fi virtually overnight.

“Verizon just wanted to ignore Wi-Fi, but they're realizing now there's an installed base out there,” Yunker said. “It would be a big step if Verizon got more aggressive about bundling its services. VoIP is huge for them, and I've been arguing they need to bundle Wi-Fi and [the carrier's high-speed EV-DO wireless service].”

Last week MCI decided to extend talks with Qwest, whose $8.45 billion bid to acquire MCI is valued at about $1.9 billion more than Verizon's current offer. Still, most observers believe Verizon will prevail, citing Qwest's anemic financial condition and prospects.

“If Verizon gets aggressive on its EV-DO pricing, that's a killer network, especially if there are Wi-Fi hot spots to offload traffic to,” Yunker said. “Especially if Qualcomm builds Wi-Fi into its next chipset, there are huge possibilities. Whoever can offer the most connectivity to the most locations is going to win.”

For its part, Gatesman said MCI's decision to expand its Wi-Fi footprint is solely about delivering data access to its subscribers.

“This is a coverage play,” he said. “But voice is a very important application, and it has certain implications we want to take a closer look at to see how it fits in here. There are people in the company looking at the potential, and it's certainly very interesting, particularly if you look at how you can apply voice over IP in a Wi-Fi environment and the mobility you get because of that.”