SBC Sees Cheap Wi-Fi as Cable Cudgel

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 internetnews.com.

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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