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Wi-Fi hotspot wholesaler Cometa Networks has confirmed that it is to shut down its network - less than 18 months after its launch.

Kent Hellebust, Cometa marketing veep, told Wi-Fi Networking News that the business failed to secure enough outside investment to continue its US-wide roll-out. The company had secured funding in earlier rounds from high-profile inevestors such as Intel Capital, IBM and AT&T.

Investment from those companies enabled Cometa to build a network of 100 hotspots in Seattle (its home town) and 150 more set up in the New York-area as part of a trial programme in partnership with McDonald's - all together a rather more modest collection than the 20,000 locations the company promised at its December 2002 launch to put in place in its first two years of operation

In part, Cometa had been counting on a major 12,000-venue deal with McDonald's which ultimately went to rival network Wayport. However, bookseller Barnes & Noble did sign Cometa to install hotspots in its 550-plus shops around the US.

Cometa's business was founded on the wholesale model increasingly being adopted by European Wi-Fi providers, such as The Cloud. The company's network service was sold to major service providers to sell onto their own customer base. It saves the network operator from having to acquire individual customers of its own - better leave that to organisations which already have heaps of customers.

Some observers say that Cometa overstretched itself, over-hyped its roll-out plan and overpriced its network. The fact remains that deals with major service providers, such as mobile phone companies and broadband Internet access operations, take a long time to finalise and often as long again to be turned into a product that the service provider can offer.

We often hear Wi-Fi wholesalers saying they're about to announce contracts with big service provider partners, but the given timeframes have almost always come and gone with no such announcement. Certainly in Europe, service providers are taking a slow, cautious approach to Wi-Fi and are only now starting to put teams in place to build product strategies and the partnerships that underpin them.

Meanwhile, Hellebust said the Cometa's 40 employees have been notified of the decision to close, which will see "the networks running for coming weeks and then phased out". ®

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