AT&T Inc. (NYSE:T) has partnered with Honeywell International Inc. (NYSE:HON) to offer in-flight, high-speed Internet in the U.S. After the announcement, the industry leader GoGo Inc (NASDAQ:GOGO)’s stock plunged more than 17% on Monday. The Dallas-based telecom giant said it will begin offering the service in late 2015. AT&T is developing an air-to-ground network in the U.S. that will allow Internet surfing and onboard entertainment.
AT&T deal to add $1 billion to Honeywell’s revenues over the next decade
AT&T Inc. (NYSE:T) will use its 4G LTE network and Honeywell International Inc. (NYSE:HON)’s hardware and systems to offer broadband services to commercial, business as well as general passengers. The company said it is also targeting airlines that want better connectivity onboard planes. Though AT&T didn’t give a potential revenue estimate, Honeywell said the deal would add at least $1 billion in revenue over the next decade.
AT&T Inc. (NYSE:T) will be directly challenging GoGo Inc (NASDAQ:GOGO), which offers a similar air-to-ground (ATG) service. Currently, more than 80% of wired commercial aircraft in the U.S. use GoGo’s service. The Itasca, Illinois-based company also allow text messages and voice calls through its network. But its service is hurt by limited bandwidth. Less than 6% users on flights use GoGo WiFi service. The network speed go down substantially if the number of users goes above 6%. Its current air-to-ground service offers a speed of 9.8 mbps in the U.S.
AT&T promises faster speeds at lower cost
AT&T Inc. (NYSE:T) didn’t specify the data speeds on its 4G system. But Honeywell International Inc. (NYSE:HON) said that the AT&T system will have greater bandwidth and speed that existing systems. The U.S. telecom giant said that the airborne WiFi is part of its strategy to provide connectivity to a wide range of applications including cars and automation in homes.
AT&T Inc. (NYSE:T) has promised faster speeds at lower cost. Improved connectivity will help more communication between pilots and crew members, and the diagnostic systems. The planes will be able to send more alerts to ground crews about parts that are close to failure so that they keep the spares ready when the plane lands.
Better connectivity will also help in tracking aircrafts. That has become a priority since the Malaysia Airlines flight MH370 disappearance on March 8 with 239 passengers and crew members.