The executives and industry analysts acknowledged that creating a new nationwide wireless network was something of an act of faith given the general economic and technological gloom in the telecommunications industry. It is widely believed that the industry has overbuilt and has over-invested in the Internet boom of the last decade.
The new company would not disclose its planned prices or the equity stakes of the five partners. Wireless industry analysts, however, have said WiFi hot spots can cost as much as US$4,000 apiece to install in public places. If the average cost is half that, the installation of 20,000 access points would cost US$40 million.
"One of the problems is that giant companies creating wireless ventures often have not had tremendous success," said Alan Reiter, publisher of Wireless Internet and Mobile Computing, an industry newsletter based in Chevy Chase, Maryland.
Other analysts questioned whether Cometa Networks would be able to make headway in an already crowded WiFi marketplace that has had both early failures and a host of smaller, aggressive start-ups. "It's obvious that what is happening right now is a wireless land grab," said Andrew Seybold, editor of Outlook 4Mobility, a publishing and consulting firm based in Los Gatos, California. "The question is how many places can they lock up and how quickly?"
Cometa executives insisted, however, that they were in a different position from their predecessors. The companies have a technological advantage in that they will not have to create customer equipment, relying on Intel's equipping the nation's portable computers with wireless abilities.
They said Cometa was also in a particularly strong position with respect to its competitors because it could use AT&T's existing data network to connect the planned 20,000 wireless access points.
Leaving the relationship with individual customers to Internet service providers "is smart from a business point of view," said Richard Miller, a wireless data industry consultant at Breo Ventures in Palo Alto, California. At the same time, he noted, the venture will not succeed unless big corporate customers demand the service.
To gain the confidence of corporate customers, the new network will have to meet stringent data security standards. Brilliant said that Cometa planned to take advantage of industry standards like virtual private networks to add security to the WiFi standard.
RSS