Why WiFi? Why not?

I had not followed the run up of rumors to this week's Apple iPad announcement very closely, but I know plenty of iPhone customers who hate AT&T's network performance, so I was as surprised as anybody else when AT&T was tapped as the lead network partner for the iPad.

But, from the reports I've read, AT&T already is encouraging would-be iPad users--vocally, and via access prices and usage policies for the tablet--to see the iPad as a WiFi Internet access device. You can argue about whether Apple forced that issue or AT&T did. However, earlier this week, AT&T gave us a different piece of news, far less hyped than the iPad announcement, that provides a different perspective on the WiFi talk and shows us why the WiFi push isn't a bad thing for AT&T.

AT&T reported Tuesday, while most pundits were summing up their arguments for why Verizon Wireless would win the iPad deal, that its customers made 35 million connections to the Internet via WiFi in the fourth quarter of 2009, and 85 million WiFi connections last year overall. Because AT&T owns a WiFi operation consisting of more than 20,000 hotspots, that trend is just fine with AT&T.

In fact, the WiFi business, which telcos back in the day dismissed as a future victim to the rise of 3G and WiMAX, seems to be doing just fine. It's a good thing AT&T hedged its bets by acquiring its one-time WiFi partner, Wayport. That deal was announced about 13 months ago, but over the last few days it has made more sense than ever.

Verizon has always been somewhat behind the curve with WiFi, though in the last year, has started offering Boingo Wireless hotspot access to its residential broadband customers, and within the last month or so started offering WiFi to its mobile broadband customers.

As both Verizon and AT&T this week reported further declines in their respective wireline businesses, and were saved by better performance in their wireless divisions, it has been made clear, yet again, how increasingly important wireless is to both companies. Being open-minded about offering different kinds of wireless options might be the best policy going forward for these big, old telcos. -Dan

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