SBC Sees Cheap Wi-Fi as Cable Cudgel

By Colin C. Haley

October 18, 2004

The carrier offers its DSL customers lots of hotspots for cheap in new service plan.

Seeking an edge over cable rivals, SBC Communications today announced $1.99-per-month Wi-Fi service for customers who subscribe to SBC Yahoo DSL.

The reduced rate -- which comes in under $29 for both -- requires a one-year commitment. The San Antonio, Texas, telecom carrier will continue offering its FreedomLink Wi-Fi to non-SBC Yahoo DSL members for $19.95.

SBC has spent much of this year expanding its network of hotspots -- from just 70 at the end of the first quarter to nearly 3,900 today. Its goal is to have more than 20,000 Wi-Fi hotspots by the end of 2006.

Users connect their laptops or PDAs to SBC access points in airports, hotels and coffee shops, as well as some McDonald's restaurants and UPS stores.

"When we can offer a high-speed broadband connection at home, plus thousands of Wi-Fi hotspots across the country, that's a better value prop than cable," Michael Coe, an SBC spokesman, told

While cable companies may offer Wi-Fi options for homes and offices, SBC believes the size of its FreedomLink network gives it an edge. SBC's bundle is aimed at both residential users and small business users, Coe said.

When DSL home customers sign up, they are offered a choice between a traditional DSL modem and a wireless LAN system. To date, SBC has sold more than 1 million wireless home gateways, which helped it see the market, Coe said. A new promotion will give new SBC Yahoo DSL customers free access to FreedomLink until April 15, 2005.

Meanwhile, SBC's research shows that 42 percent of its business customers are mobile at least 20 percent of the time. In all, SBC has 4.3 million DSL customers.

Spokespeople for Comcast and Time Warner Cable -- which compete against SBC with their own cable TV, phone and broadband access -- were not immediately available for comment.

For SBC, the move is the second in as many weeks that leverages the FreedomLink network. Last week, the company said it wants to use hotspots to expand the footprint of Cingular Wireless, a mobile carrier it co-owns with BellSouth .

The plan, still in the early stage, would allow customers to also use their phones through Wi-Fi hotspots. A number of details still need to be worked out including a handset with that capability, SBC said.

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