SBC, Verizon Raise Stakes In Wireless Internet Game

The San Antonio-based phone giant is announcing plans Wednesday to open more than 20,000 wireless Internet access points in 6,000 locations over the next three years in one of the biggest rollouts yet of the technology known as Wi-Fi.

The service will be concentrated in SBC's 13-state service area, which includes Texas and California. Officials said SBC will add access to additional 'hot spots' at 565 hotels and 13 airports nationwide through a roaming agreement with Austin-based Wayport Inc.

SBC's announcement was expected to come one day after Verizon Wireless said it would collaborate with Wayport to speed up its service at hot spots in heavily trafficked locations. Last month, Sprint Corp. said it would offer high-speed wireless Internet access by the end of summer through deals with Wayport and other carriers.

The moves indicate that the phone companies finally realize that more of their customers will want to use Wi-Fi, or wireless fidelity, to go online, analysts said.

Still, it's not too late for SBC to become a profitable player in Wi-Fi, said Sarah Kim, an analyst with the Yankee Group research firm. She said many of the companies that have announced plans to offer Wi-Fi service haven't gotten very far.

"The (phone) carriers weren't sure this was going to be big enough, so they brushed it aside. Now they're rushing in," Kim said.

Kim said Wi-Fi could buttress Internet revenue for SBC, which has seen steady erosion in its core local-phone-service business.

Wi-Fi allows several computers within a short distance of each other to share a high-speed Internet connection. Early ventures have led to the creation of thousands of access points in coffee shops, airports and hotels.

Brooks McCorcle, SBC's vice president for Wi-Fi, said the company's first access points would open in the next two months and 1,000 would be running by year end with a faster pace of installations in 2004 and 2005. The company also plans to bundle Wi-Fi service with next-generation mobile-phone service from its Cingular Wireless joint venture.

"There is a whole lot of opportunity out there," she said. "I don't think we're late. We're putting skin in the game."

Company officials declined to say how much they would invest in the Wi-Fi strategy but called it a modest sum. Use of a section of the radio band is free.

McCorcle said SBC would also outfit some pay phones in undisclosed big cities with Wi-Fi transmitters. Verizon plans to equip 1,000 pay phones in New York with transmitters to let its high-speed Internet service customers go online from their laptops in huge swaths of Manhattan.

SBC officials declined to say how much they will charge. Verizon Wireless said it would charge $7 for 24 hours and $35 for one month of access.