Boston, MA 04/29/2014 (wallstreetpr) – Till date, the internet offered over the US airspace, is controlled largely by one player. The company Gogo Inc. (NASDAQ:GOGO) is the dominant in-flight internet connectivity provider
However, there are two companies which are joining forces to mount a challenge. These companies are AT&T Inc. (NYSE:T) and Honeywell International Inc. (NYSE:HON). These companies are planning to launch their services by the second half of the year 2015. The agreement between these companies is that T will use its 4G based LTE network and HON will provide the hardware and other systems. The companies are targeting a large client base. This will include corporations, normal flyers and those flight carriers who want better connectivity on board their airplanes.
Honeywell International Inc. (NYSE:HON) has stated that the revenue target from this partnership is close to $1 billion in a ten year period. However, executives at T refused to discuss what could be their earnings from this deal. As per HON, there has been a letter of intent already signed and a format contract will be inked shortly between the two.
Intense competition can lead to better connectivity
Gogo Inc. (NASDAQ:GOGO) has been able to stay out in front by providing an extremely stable internet facility. The company’s services are used in close to 80% of commercial airlines in the US. This includes all the major airlines.
The company’s CEO stated that they were the pioneers in this field for the last two decades. Recently Gogo Inc. (NASDAQ:GOGO) also announced the launch of a new system that uses satellites and a dual antenna to provide speeds touching 70 Mbps in contrast to the 9.8 Mbps offered by the current system.
The deal between AT&T Inc. (NYSE:T) and Honeywell International Inc. (NYSE:HON) comes on the back of a number of different in-flight services being launched in the U.S. airspace. These services use the KU or KA satellite system. The makers of these systems state that the connectivity provided by them is faster, wider and cost efficient. This may lead to the development of better real time in-flight systems which will ensure better safety for all airlines.
