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AT&T Snacks on Wi-Fi Provider for $275M


AT&T is acquiring venture-backed Wi-Fi provider Wayport in an approximately $275 million deal announced Thursday that will extend its Wi-Fi footprint to more 10,000 McDonald’s restaurants in the United States.

Wayport, backed by Sevin Rosen Funds, New Enterprise Associates, Scale Venture Partners and others, competes with companies like Boingo and T-Mobile in managing Wi-Fi hotspots in domestic and foreign markets.

In a joint statement, the companies said the deal expands AT&T’s network to 20,000 domestic hotspots and more than 80,000 locations worldwide, including some that charge roaming fees.

Wi-Fi and similar technologies like Sprint’s nascent WiMax Xohm network are increasingly important as cellular users migrate to smart phones, such as Apple’s iPhone on the AT&T network and HTC’s G1, the first phone based on Google’s Android operating system, which operates on the T-Mobile system.

Wayport customers Wyndham, Marriott Vacation Club and Four Seasons hotels and auto rental provider Hertz offer Wi-Fi as an amenity to business and leisure customers while retailers like Starbucks and McDonald’s hope to sell more coffee and burgers to customers who tap into their hotspots.

"We're seeing exponential growth of Wi-Fi-enabled devices -- such as smartphones -- combined with a continued dependency on 24/7, anytime, anywhere Internet access across business and consumer market segments," John Stankey, president and CEO, AT&T Operations, said in a statement. "Now is the right time for AT&T to affirm our commitment to Wi-Fi leadership.”

Twelve-year-old Wayport also is backed by INVESCO Private Capital, Trellis Partners, Advanced Equities, Inc., Lucent Venture Partners, GC Technology Fund, Sanders Morris Harris, Star Ventures and GIC.