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Wednesday, September 11, 2013

Gogo (GOGO) 2 months after IPO

Gogo Inc., GOGO +4.53% the largest provider of inflight Internet in the U.S., on Wednesday plans to unveil a system that uses a combination of satellites and cellular towers, connecting airplanes to the Web at speeds six times as fast as its current best option.

Virgin America Inc. will launch Gogo's new inflight Wi-Fi service in the second half of 2014 and says it expects to eventually upgrade its 53 aircraft with the product.

That comes after JetBlue Airways Corp. JBLU -1.74% received government approval last week to install a new high-capacity satellite link on many of its aircraft, an inflight Wi-Fi solution that can support streaming video to fliers' devices from Netflix Inc. NFLX -0.38% and Hulu, among others.

JetBlue, which has lacked inflight Internet, plans to launch the service on some aircraft this year and equip its entire fleet of 180 aircraft by the end of 2015.

Gogo sets the prices for its onboard Wi-Fi, with options including $14 one-day passes and $50 monthly passes.

JetBlue said it is reviewing pricing for the service, but that basic Internet use initially will be free, while the airline will charge fliers for streaming content, which uses more bandwidth. Other airlines that provide Wi-Fi currently block access to streaming services like Netflix, to avoid cannibalizing their own fee-based inflight entertainment.

The new technologies could mean Internet speeds in the air that are at least as fast as the average Internet speeds for Americans on the ground—something that could help break down flier resistance to paying and make the service profitable.

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