Gogo's stock crashes after AT&T unveils in-flight LTE network plans
Gogo still believes it will have a global network for planes, while AT&T is focusing on continental U.S. by end of 2015
Computerworld - In-flight Wi-Fi provider Gogo's stock took a drubbing after AT&T on Monday announced plans for a new air-to-ground LTE service that will surely compete against Gogo, at least in the continental U.S.
Gogo's stock plummeted by as much as 18.8% overnight to $14.92 per share before the Nasdaq market opened on Tuesday. The stock then recovered slightly to $15.20 at Tuesday's opening, then fell back to $14.21 at 10:32 a.m. ET, a 22.68% decline from Monday. Gogo's stock ended the trading day down by 28.61% to $13.12.
AT&T didn't offer many technical details on how it plans to build its network by the end of 2015, but said in a statement that it "sees an opportunity to deliver an innovative and high-performing in-flight connectivity and entertainment service, and will build on existing relationships within the aviation industry to deliver a better customer experience than what is available from others today."
While AT&T called its proposed network "innovative" it also said it doesn't expect additional capital expenditures for the initiative to be material.
AT&T didn't describe how the network will work and how much it will rely upon the terrestrial LTE network it has rolled out across the U.S.
Jack Gold, an analyst at J. Gold Associates, predicted that AT&T won't likely rely on its existing LTE network for the air-to-ground capability.
"To do this correctly, as Gogo and others have done, it requires specific base stations on the ground that are geared towards wide-area coverage for the airplanes and a dedicated frequency for the effort that doesn't directly interfere with terrestrial LTE," Gold said. AT&T said it already has the spectrum it needs for the new service, but didn't elaborate.
Gold also said AT&T won't need to make massive expenditures -- the biggest cost will probably come from outfitting and retrofitting airplanes.
It has cost up to $1 million per plane for Gogo's service, Gold said.
Gogo is now rolled out to 2,000 planes flown by Delta Air Lines, American Airlines, Virgin America, United and US Airways, among others, as well as more than 6,000 business aircraft, according to Gogo's Web site. Gogo first debuted on commercial aircraft in 2008 and is the global leader in inflight connectivity.
In a statement, a spokesman for Gogo said AT&T's announcement validates the "great business that Gogo has created." He emphasized that to compete in the in-flight wireless business, a company needs to be global, which is a focus of Gogo.
Gogo is also deploying two new technologies -- GTO (Ground to Orbit) and 2Ku (which stands for two Ku antennas) that bring a wireless signal to each plane that is faster than 70 Mbps, and will increase to 100 Mbps as newer satellite technologies are rolled out, the spokesman said.
- Stop Guessing, Start Measuring: How to Use Mobile Analytics to Deliver the Best App ROI This interactive e-book investigates how mobile is driving the need for app and portfolio measures unlike any we saw in the days of...
- APIs & MBaaS: How to Extend Your Enterprise Architecture for a Mobile World "Mobile," as Forrester Research observes, "is pushing aging web architectures to the brink." Download this whitepaper and learn how each of these requirements...
- Three Principles of the Mobile Era or Mastering the Mobile Shift: Three Keys to the New Enterprise In this whitepaper, you will learn the tools, technologies and strategies that are necessary for a mobile-ready IT to master the 3 keys...
- Mobile First: Securing Information Sprawl Learn how the partnership between Box and MobileIron can help you execute a "mobile first" strategy that manages and secures both mobile apps...
- It's not too late...Get Your Mobile Questions Answered Live! How can IT provide seamless and secure mobile communications and collaboration for all? Join this live Webcast as IDG asks an expert panel...
- Why do you need an enterprise mobile platform? Today companies must offer great apps that run on a range of devices, and connect to an exploding set of backend data. Appcelerator... All Mobile/Wireless White Papers | Webcasts