[Infowarrior] - Verizon to exit in-flight phone business

[Richard Forno]

Verizon to exit in-flight phone business

By Marguerite Reardon
http://news.com.com/Verizon+to+exit+in-flight+phone+business/2100-1033_3-608
7534.html

Story last modified Fri Jun 23 16:30:41 PDT 2006

Verizon Airfone will exit the in-flight phone business by the end of the
year, a company spokesman confirmed Friday.

Airfone's parent company, Verizon Communications, plans to focus its efforts
more on its core business, said Jim Pilcher, a spokesman for Verizon
Airfone.

Verizon, the second-largest phone company in the U.S., is in the midst of a
multibillion-dollar upgrade to its network to compete better with cable.
Verizon's new Fios network extends fiber-optic cable directly to homes.
Using these new fiber connections, Verizon plans to offer high-speed
Internet access, phone service and television.

Verizon acquired Airfone back in 2000 from GTE. The air-to-ground phone
system, which first began about 21 years ago, is installed in about 1,000
planes operated by Continental Airlines, Delta Air Lines, United Airlines
and US Airways. Pilcher said the company will work with the airlines to
figure out how to remove the phones and other equipment from the planes.

Due to its high price tag, the Airfone service has never been popular. The
service costs 69 cents per minute for Verizon Wireless customers, or 10
cents a minute for a $10 fee per month. But for people who are not Verizon
Wireless subscribers, the prices are much higher. For domestic calls it
costs $3.99 to connect the call and $4.99 for each additional minute.
International calls require a connection fee of $5.99 and $5.99 for each
minute of calling.

Verizon Airfone had been a favorite to win the Federal Communications
Commission's auction of 800MHz spectrum, but it dropped out of the bidding
early.

A company called AirCell ended up winning a license to use the spectrum
currently being used by Airfone. Earlier this month, AirCell said it plans
to use its radio spectrum license to offer "affordable" wireless broadband
service based on Wi-Fi standards aboard commercial airplanes.

Verizon's license would have expired in 2010, but because of the auction,
the company would have had to relinquish its part of the spectrum within two
years of when AirCell receives its own license.