Alltel dives into WiFi, offers up variety of plans
Based on a new section of Alltel's website, it seems pretty safe to say that the carrier is jumping head first into the WiFi arena. Apparently, Alltel customers can now sign up for a variety of WiFi plans that will enable them to surf …
Context & Ripple Effects
Alltel's move lands in a year when WiFi stopped being a coffee-shop amenity and became carrier infrastructure: T-Mobile's range-extension play was laid out in the Wall Street Journal back in May (How Wi-Fi Can Extend T-Mobile's Range), and AT&T followed with municipal WiFi in California in July (AT&T sets up 'Muni' WiFi in California). Alltel is now the third major carrier this year to formalize WiFi as part of its data offering, with a menu of plans rather than a single bundle.
The timing matters against the backdrop of Alltel's confirmed $27.5 billion take-private by a consortium including Texas Pacific Group — announced in May as the largest telecom buyout ever. A leveraged Alltel has an incentive to squeeze more revenue per subscriber, and tiered WiFi plans are a low-capital way to add a line item while offloading traffic from its cellular network.
First-order effects
- Alltel customers can immediately sign up for multiple WiFi plan tiers, giving the carrier a new subscription line and subscribers cheaper browsing options alongside their cellular data plans.
Second-order effects
- AT&T and T-Mobile, which both committed to WiFi earlier in 2007, now face pressure to match Alltel's tiered-plan packaging — turning WiFi from a differentiator into table stakes across the three carriers.
Third-order effects
- If all three carriers keep building WiFi into their data products, hotspot operators and municipal WiFi projects shift from standalone businesses to wholesale inputs that carriers bundle — and cellular networks increasingly lean on WiFi to absorb data growth they cannot economically serve alone.
The trend: US wireless carriers are absorbing WiFi into their core data plans as a coverage and capacity extension, converting what was a third-party access business into carrier-controlled bundling.