AT&T Wireless Broadband moves into Kansas City; Cincinnati is next

With an Aug. 9 launch in Kansas City and one coming soon in Cincinnati, AT&T Wireless Broadband (www.iatt.com) will be offering its voice and Internet service in 10 major markets.

The company remains convinced that its bundling strategy is the right way to go as it finds a niche in the local telephone market. Lois Hedg-peth, AT&T Wireless Broadband central region president, said customers haven’t questioned the idea of a combined service. The local (and long-distance) phone service comes first with the Internet connection as an add-on.

“People seem to understand that if we deploy equipment, it makes sense to deploy for both voice and data,” Hedg-peth said. The carrier has five towers up now in Kansas City, and a total of 70 anticipated by year-end. Hedg-peth pointed to about 100 customers a few weeks after the launch. She said generally the take rate for the Internet service is between 40% and 60%, although she had no specifics for the Kansas City market.

“Customers want a choice,” she said. “For years, they’ve had no choice at all.”

Ron and Sandra Marshall of Parkville, MO, were the second customers to sign up for the AT&T service. They became part of the early-adopter test group, snagging their first three months of service free. The Marshalls, both retired, were most interested in the Internet connection that AT&T offered. Ron Marshall already had contacted Southwestern Bell (www.swbell.com) and determined that he didn’t live in an area that could get DSL. The couple doesn’t subscribe to cable. So the 2-computer household was making do with a dial-up modem, which meant taking turns to get on the Internet, and subscribing to a voice-mail service from Southwestern Bell so they could return missed phone calls.

So when two door-to-door salesmen stopped by, the Marshalls were ready to listen.

“When they said it was as fast as DSL or cable, my ears perked up,” Ron Marshall said. He has been a ham-radio operator for years and knows a few things about RF, so he had quite a few questions for the salesmen. Although the men “weren’t all that knowledgeable,” he said, Marshall was hooked and decided to sign up.

It took the AT&T people about four hours to set up the system which consists of the Project Angel “pizza box” antenna on the outside of the house and a connection in the basement. The Marshalls kept their existing phones and phone number, which is ported from Southwestern Bell.

As an enticement, AT&T Wireless offers customers in the Kansas City area their entire state as a local calling area — Kansas for the Kansas residents, Missouri for the rest — but only through mid-2002. This was a selling point for the Marshalls.

“We’re not too worried that it will go away,” Ron Marshall said. “And if it does, they’ll probably come up with another deal.”

Hedg-peth indicated that after mid-2002, customers would be paying AT&T’s long-distance rate of 7¢, outside the Kansas City area. As it is, the Marshalls say they pay about the same for phone and Internet as they did before, about $80 a month. This is the same amount Michael Keith, AT&T Wireless Broadband president, speaking earlier this summer, gave as the average monthly revenue per subscriber.

As its value proposition, AT&T Wireless is comparing its bundle of two voice lines plus high-speed data at $72 with similar bundles from Southwestern Bell costing $118 in Missouri and $111 in Kansas. As far as the speed of the system is concerned, AT&T Wireless is a little vague.

“We don’t quote speed,” Hedg-peth said. “It’s a shared system that is about 10 to 15 times faster than dialup.”

Published information from AT&T Wireless states that the AT&T Internet service could reach speeds up to 15 to 24 times faster than the typical 33kb/s to 40kb/s speeds for dial-up analog modems. Doing the math, that would equate to 960kb/s at the high end.

Southwestern Bell’s residential DSL offering advertises speeds up to 1.5Mb/s.

When AT&T Wireless formulated its broadband plans, it was restricted to the markets where it had spectrum and where it would not be competing directly with AT&T’s cable properties (www.att.com).

“Now we’re free to go into areas to compete against AT&T cable,” Hedg-peth said. However, as planning is done 16 to 18 months in advance, the launches in the near future will be in non-cable cities, she added.