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AT&T cancels plans to offer in-flight Wi-Fi service

AT&T Inc. is scrapping its plans to introduce 4G LTE wireless Internet access on commercial flights.

AT&T had said in April that it would work to build a land-to-air high-speed network to serve airlines with in-flight Wi-Fi Internet access. The service, in partnership with Honeywell International Inc., was to be introduced as soon as late 2015, mounting a potential challenge to Wi-Fi provider Gogo Inc.

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The effort to offer in-flight Wi-Fi is being sacrificed as AT&T trims its capital expenditures for next year 14% to about $18 billion. AT&T reduced the forecast last week at the same time that the Dallas company announced the $2.5-billion acquisition of wireless provider Grupo Iusacell as it furthers its push into Mexico.

"After a thorough review of our investment portfolio, the company decided to no longer pursue entry into the Inflight Connectivity industry," Fletcher Cook, a spokesman for AT&T, said in a statement. "We are focusing our capital on transformative investments, such as international and video."

Gogo spokesman Steve Nolan declined to comment on AT&T's decision.

Gogo has spent about $1 billion on building its business and a network to serve airlines, Chief Executive Michael Small said. "We look forward to competing with existing competitors and anyone else who wants to get into the space," he said.

After AT&T's original announcement, shares of Gogo dropped 29% in one day. On Monday, after AT&T canceled its in-flight Wi-Fi service, shares of the Itasca, Ill., company jumped $1.76, or 10.6%, to $18.40. AT&T shares rose 21 cents, or 0.6%, to $35.12.

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