AT&T purchased Wayport about a year and a half or so ago. Wayport was the leading underlying provider of WiFi and Broadband services about a year or so ago. At that time Wayport's biggest customer was McDonalds. AT&T quickly took over StarBucks via Yahoo's ad engine as the cost savings driver, and now roughly has struck what I consider their first big deal. They've landed Hilton to provide WiFi and Guest Broadband services.
This comes after some global horse-trading between AT&T and Swisscom, who along with Intertouch, DoCoMo's hospitality arm, are pretty much the global market leaders to hotel operators as the provider of broadband services, a space previously dominated by T-Mobile (who I predict will shed that service in the next 18 months or so.) Over the past two years, T-Mobile which pretty much owned the hotel and airline club space has been giving up market share, especially in the USA. So, why do I single out these three companies related to the AT&T story about Hilton? Its simple.
The hotel connectivity for travelers in Hilton hotel properties in the USA has been so bad for the past five years that I went from being nearly a Hilton Diamond guest to Silver and now will be lucky if I qualify for that this year, if at all. And I'm someone who has traveled globally over 300 days in 2008, 275 days in 2009 and am on a pace to match the average of the last two years this year. Since 2006 Hilton has mandated to their properties, many of which are nothing but franchises to use Hilton "approved" providers, many of whom have simply run the Internet over the existing twisted pair (DSL) or some kind of ethernet over the existing in room TV coax. In some cases they have added WiFi, but in almost all locations at best you have seen no more than a pair of T-1s providing the kind of coverage that gives guests at best speeds that were only considered great when dial up was the access king (i.e. 56K)
And now days, access to real broadband is important. Especially to AT&T and their customers, as the consumption of content and delivery of mission critical information goes over the 'Net. For iPhone users in a Hilton, the inability to access the Net over WiFi, let along 3G is now critical. With AT&T now saying they "will ensure that hotel guests receive fast wi-fi and Internet services through a wired connectivity over a common Internet access platform" should mean a lot to the business traveler. But will it with the Hilton property owners.
First to really deliver this means that AT&T has to go past the demarcation point (where the service is handed off to the premise owner.) They are actually going to have to redesign and upgrade many of the internal distribution systems, many of which are controlled by OnCommand and other in room guest services/entertainment companies. Then there is the actual access point for WiFi. Anything short of the commercial grade Bel Air, Motorola or Cisco access points will mean an experience that is less than solid. And that's only for WiFi.
But I think this deal goes farther. I think AT&T has been reading some of Machiavelli. Specifically, "The Prince" where the fundamental and underlying premise is about "territory establishes control."
1. AT&T wants better in hotel coverage for voice calls. That means Femto or Pico cells being installed that work with guess whose network? AT&T.
2. Broadband Media Delivery of TV. Can you spell UVerse. First WiFi and Broadband, then the entertainment to the rooms both wired and over WiFi
3. WiFi access on the property
And who said AT&T isn't still about being a monopoly.