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Gogo Inc. Message Board

  • alangreenspam alangreenspam May 8, 2014 1:55 PM Flag

    My theory: AT&T wants to BUY INTO airline wifi biz, not develop it. (e.g. acquire GOGO)

    Since GOGO has much of the in-flight wifi real-estate locked up and has a huge technology advantage, the AT&T announcement that they were getting into in-flight wifi, was puzzling for many of us who understand this niche. It just didn't make sense!

    It seems obvious to anyone that the timing of the AT&T in-flight wifi offering coming out in 2015 completely misses their window of opportunity because Gogo will have tied up most of the market by then, especially for Ku-based satellite long-haul flights.

    Part of AT&T's strategy in making such a "competitive" announcement, may have been to depress Gogo's share price to help their intended move into this space via acquiring GOGO. If they slam Gogo's price down to the $12-13's, it makes it a lot easier for them to offer $22/share for the company than if it was trading at $20/share. AT&T may not be serious at all about actually developing the technology and winning customers. And how do they think they'll have staying power in this space if they don't offer long-haul wifi via a satellite network?

    I realize after a big drop in any company's share prices, every desperate trader always likes to chant, "XYZ company is now an acquisition candidate!" - even when it's clear there are no logical potential acquirers.

    But in this case, AT&T's entrance into in-flight wifi would ONLY make sense if they acquired GOGO. If they don't, it's clear they'll be wasting a lot of money on a fruitless pursuit against a company with a huge first-to-market advantage.

    Ravi, Elsondie (or others here), do you guys have any comment on this?

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • Could T partner with GSAT for long haul flights ?

    • Make about as much sense as anything could. From a technical point, AT&T has a whole lot of hurdles to jump. Yet they make a bold statement to be up and running 2015, and entering using 4G LTE, unless they have been building towers in secret, applied for numerous licenses, and have something up their sleeve with 4g that they don't want to release for general, they don't stand a chance. 4g is about 16-18 mbps , depending on where you live. Now AT&T did win speed contest over others, true , but it is nothing compared to GTO. They lost heavily to Verizon for both reliability and availability. Verizon absolutely crushes them in the latter. If the plan to put up towers like there land solution, targeting less than 20% of US geographically, well they will have even poorer coverage than ViaSat.
      Now that Gogo has entered with Being to line-fit for their customers , they are even farther behind the 8 ball.
      That 'shiny" clause will never ever get the chance of daylight. Even if anyone comes up with a solution a bit quicker, no airline company will take their jets out of service to retrofit.
      AT&T plan to use under the wing antenna /cell tower solution,( same as gogo for regional) it will never get any farther. The GTO is propriety , same as 2Ku. These solution ideas , in general are not revolutionary. I have been trying to find how far their patent extends. For example, I proposed the question to the VSAT engineer I was recently overseeing on an installation. Given you wanted to procure the same amount of bandwidth off a satellite , yet increase you speed , how would you go about. He came up with the same resolution as I did, the same Gogo revealed 10 days later. However where their patent may truly lie is in the antennas by ThinKom. They keep those shielded from eyes very well.
      However neither of us even came close to the GTO idea, truly innovative IMHO
      Unless you are correct, I too don't see much in it for AT&T, especially now that Gogo is starting big international GLTAL

      • 1 Reply to elsondie
      • Thanks Elsondie... Good stuff. GLTAL.

        The CEO has to speak to the AT&T entrance and diffuse it in the conference call.

        A GOGO tie-up with Verizon would effectively KILL ATT's entrance into this niche. By a tie-up, I mean perhaps a partnership to support VZ clients seamlessly so GOGO's billing would automatically be paid on their VZ bill. Just a thought for a symbolic attack on AT&T.

    • Att is a very smart organization and has lots of capabilities in the connect ability area in any manner of wifi or data Or VtoV . They also have been acquiring technology over the past ten years at a very rampant rate . Which is there new style . Gogo has a major barrier to entry into the markets via its contracts with airlines and planes along with frequency licenses in many countries along with new ones being issued.
      They now are an ATT target
      My key question is what can happen here short term on Monday can we fall off the map? Can revenues be so bad that we get hit another 30pct as some think . I can not imagine it but I am frustrated and worried . My we try point is at 18 and I have added on the way down but the pain is hurting I have taken stops off and was lucky yesterday because I did not loose the position with the bear raid.
      Any thoughts

      • 1 Reply to benjaminne2004
      • Look at it this way: There has been a litany of "bad" news, whether questionable (ENT Lawsuit), or strange (AT&T announcing their entry into this niche, the dishonest attack interview of the CEO by CNBC's Melissa Lee.

        Pre-earnings, there has been a load of AT&T trepidation by investors, hence the downside recently.

        The saw cuts in both directions and at some point a rally occurs. I think there will be a major RELIEF RALLY after earnings because GOGO will demonstrate that they're forging ahead splendidly. Meanwhile, AT&T is just at the starting line.

    • I agree 100%!!!! I have stated this over and over........They would be idiots to even attempt to try to get into this business!!!! And it costs the airlines ALOT of capital to change to another provider!!!! I really feel bad for the weak hands that were scared out!!!!

      Sentiment: Strong Buy

      • 1 Reply to yannimeow
      • I am a believer that it is an acquisition target but how much longer can the retail investor keep taking it up the you know what. There has to be some support somewhere. One more trading day till earnings but at this rate it will be under 10.00 and the same price as ENT. How can that be? With the way this is falling, one has to wonder if someone doesn't know something. You would think a fund would be all over this. At 12.00 and falling it could be a long road to get 16.00. A lot of people's lives are changing on this decline.

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