Less than 18 months after it was created in a well-publicized bid to bring about nationwide wireless access in the United States, Wi-Fi wholesale network operator Cometa Networks has announced it is suspending operations, citing a lack of money.
Short History
Cometa was formed in December 2002 by AT&T, Intel, and IBM to provide nationwide broadband wireless LAN Internet access. The company had planned to deploy WLAN Wi-Fi hotspots offering a raw data rate of 11 megabits per second in the top 50 U.S. markets in 2003.
It currently has about 300 hotspots, mainly in coffee shops, bookstores, and office buildings in Seattle and New York, says Jennifer Gehrt, a Cometa spokesperson.
"The existing investors did not perceive the [return on investment] on additional capital that was needed for the nationwide expansion to be where it needed to be in order for them to put more capital into the company," Gehrt says.
She says the company was also unable to attract new investors. She declines to say how much capital Cometa had raised to date.
Playing With Giants
"This comes as no surprise," says Chris Kozup, an analyst at Meta Group. "There was bound to be some cooling off within the Wi-Fi hotspot market."
Kozup says a lot of people believed this hotspot market was going to be the next hot technology and a lot of business plans were predicated on healthy consumer demand. However, Cometa never really established an active service with a fully deployed network.
"Their agenda when they launched was to be the ubiquitous Wi-Fi provider, but I think they got off to a very slow start," Kozup says. "They were troubled almost immediately with political issues. When you have three big giants in the ring like Intel, IBM, and AT&T, there are bound to be some issues."
Kozup says Cometa just wasn't able to execute its business plan as it initially said it would, so it made sense for the company to close its doors.
