March 9, 2004 4:15 PM PST

Barnes & Noble picks Cometa for hot spots

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Bookseller Barnes & Noble said Tuesday that it has chosen Cometa Networks as the sole provider for hot-spot service in its stores, opening up about 650 locations for the operator.

While Cometa will provide hot-spot coverage, it is working to bring in service providers to offer authentication and billing capabilities. Hot-spot service allows subscribers to wirelessly access resources--such as a broadband Internet connection--available on a network. Multiple providers per location is an important aspect of Cometa's business model, because it helps drive down cost and pricing for the service while also increasing the amount of traffic on the network.

Cometa has been working to make its network available to telecommunications companies, Internet service providers, cable operators and wireless carriers. The goal is to allow providers to decide how they want to offer the hot-spot service. Most are expected to bundle hot-spot access with other services.


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"Barnes & Noble is our anchor tenant, and we will support them further with other locations, such as coffee shops and public spaces," said Gary Weis, chief executive of Cometa. "We need to build the scale of usage as quickly as possible."

Barnes & Noble representatives said that by offering hot-spot service, the bookseller is looking to build loyalty and traffic.

"We want to make our stores--and specifically, the cafes inside them--a destination, and hopefully, (the hot-spot service) will bring (customers) back more often," said Gary King, chief information officer at Barnes & Noble.

The multiple-service provider model is advantageous, because it gives customers choices, when it comes to service plans.

John Yunker, a Pyramid Research analyst, said Cometa will have to diversity the types of locations in which its service is available.

"If they are hitching their model to retail stores, they face an uphill climb," Yunker said. "The highest commercial usage comes from hotels and airports; retail is near the bottom of the list. That could change with low service fees and a device that conveniently gives service to the mass market."

Service providers that have teamed with Cometa have been very aggressive with their pricing. In Seattle, access was available for $11.95 per month for unlimited usage. Some service providers that aren't partners with Cometa are charging as much as $30 per month.

The partnership with Barnes & Noble more than triples the number of hot spots Cometa operates. Installation of hot-spot service will be phased in gradually and will be completed by September.

At the same time, Cometa will be installing networks on a nationwide scale in an array of urban locations, including coffee shops, restaurants, shopping centers and office buildings.

Cometa, nee Rroject Painbow, has the backing of tech leaders Intel, IBM and AT&T, as well as venture capital firms Apax Partners and 3i Group.

 

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