Cometa Absorbs Toshiba Hotspots

By Eric Griffith

April 20, 2004

Toshiba's enthusiasm for installing public access Wi-Fi has waned after losing the McDonald's contract, but Cometa Networks is ready to pick up the pieces.

Toshiba America Information Systems (TAIS) of Irvine, Calif., the company behind the Toshiba SurfHere hotspot initiative to provide wholesale Wi-Fi networks, has signed to hand over its existing and under-contract hotspots to the major wholesaler, Cometa Networks, headquartered in Schaumburg, Ill.

"We are not deploying any more hotspots," says Chris Harrington, vice president, strategy and business development for TAIS.

Toshiba SurfHere has about 350 active hotspots with more under-contract or in trials, according to Harrington. TAIS is in the process of introducing all the venue owners to Cometa, who will in turn try to convince the venues to joining with the Cometa network.

This announcement comes in the wake of the decision by McDonald's Corp. to use Wayport to build out its nationwide network of hotspots in North America. Wayport, SurfHere and Cometa had been locked in competition by McDonald's to see which would get the contract. Each company installed hotspots in different metropolitan areas during the trial. In the end, Wayport was the winner -- it had already taken over the Toshiba SurfHere locations in Chicago area McDonald's be the time the fast-food chain made the announcement.

Toshiba launched its SurfHere network early in 2003, with a goal of installing 10,000 by the end of 2003. The plan was to sell inexpensive equipment to venue owners who could then be signed with other network operators as they wanted.

Cometa was formed by AT&T, Intel, and IBM along with investment partners. It recently regained some footing with announcements that it would unwire Barnes & Noble Booksellers locations. The company likewise made grandiose claims when it launched, saying it would have anywhere from 15,000 to 20,000 hotspots eventually.

"Those previous projections were just that: projections," says Harrington. "We were aggressive and optimistic, but that was part of hoping to see the public Wi-Fi space move quickly."

Harrington says TAIS's motivation now is to focus back on the core business of notebook PCs, and that installing hotspots can only increase the value of notebooks to the end user.

"We'll work with Toshiba as they continue to provide value to their mobile customers," says Cometa CEO Gary Weis.

The SurfHere name will become the property of Cometa, but Weis says they have not decided what to do with it yet: "I'm just being practical. We haven't even met all the operators yet."

Weis added that Cometa is on track to have the majority of its Barnes & Noble deployment done by June.



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