Gogo CEO on AT&T’s Plan to Invade His Airspace
Though he hadn’t necessarily expected AT&T’s in-flight Internet plan announcement to come Monday, Gogo CEO Michael Small said he isn’t surprised to see big companies looking to the skies as their next growth area.
“It’s kind of remarkable the opportunity is so exciting it is attracting the largest companies in the market,” Small said in a telephone interview with Re/code on Monday. “We will have competitors and they will keep us on our toes. That will probably make us go even faster.”
However, Small said that Gogo will show itself to be a tough-to-unseat rival.
“The 20 years’ experience we have and all the assets we have in place make us a very tough competitor in this business,” he said. With many of its airline customers, Small noted, Gogo has a 10-year exclusive deal. Even after those deals expire, Small said, Gogo expects to be able to grab its share of the business.
In particular, Small stressed that Gogo has more than just its U.S. air-to-ground network and is adding satellite-based options to ensure it can offer global service to what he noted is an increasingly global business.
AT&T didn’t announcing pricing or technical details, but said it expects its service to be up and running by as early as late next year, with options for both business planes and commercial aircraft.
While Gogo has been criticized at times for slow speeds and increasing prices, Small noted that the company is in the process of deploying 10 megabit-per-second service, up from the initial 3Mbps, and has announced plans to increase that to 70Mbps using satellite and other technology.
That, he said, should offer a significant speed bump, though perhaps not enough speed and capacity to allow everyone to stream movies from Netflix.
“Everyone will have a great browsing experience,” he said. “A limited number of people — probably chosen by willingness to pay — will be able to stream video.”
Other rivals also talked about AT&T as “validating the market,” as companies often do when a giant enters their turf.
“The entrance into this market by AT&T reflects the tremendous growth potential of in-flight connectivity and the delivery of unique content to airline passenger’s devices,” said Dave Davis, COO of Global Eagle Entertainment, whose Row 44 subsidiary powers Southwest’s in-flight Wi-Fi. “While AT&T’s plan appears to be to build a domestic Air-To-Ground based product, Global Eagle remains focused on marketing satellite-based services to the fastest growing markets outside the U.S. where inflight connectivity market penetration is less than five percent, and to domestic customers seeking the advantages that only satellite-based connectivity can bring.”
Meanwhile, ViaSat, which provides satellite-based in-flight Internet to JetBlue and others said AT&T’s announcement shows that “it’s an exciting time for consumers as technology is finally enabling high-speed broadband for air travelers.”
“For the service providers, success in this market will be defined by delivering an on-the-ground equivalent service with the best economic model for both airlines and passengers,” ViaSat said. “And with our Exede in the Air offering, the bandwidth economics for airlines are equal to the cost of providing a bag of peanuts to their passengers. That’s the kind of disruptive, innovative approach that the in-flight Wi-Fi market hasn’t seen before.”