Marking a big milestone for its business and the industry at large, Boingo Wireless has signed a major multiyear Wi-Fi offload agreement with a Tier 1 U.S. wireless carrier.
The deal will include deployment on up to 40 million of the carrier's handsets for Wi-Fi offload at Boingo's managed and operated (M&O) networks in 2015, as well as the option to auto-authenticate onto Boingo's aggregated network of Wi-Fi hotspots.
The announcement is not exactly a surprise. Boingo CEO Dave Hagan said during the company's fourth-quarter earnings call that Boingo expected to sign a long-term deal, a milestone it has been working toward for years.
"The carriers are realizing yes, Wi-Fi is a good thing, we should make it part of our network topology, and companies like Boingo will benefit as a result," Hagan said during Deutsche Bank's 23rd Annual Media, Internet & Telecom Conference.
A trial had been underway with the carrier for a little over a year, starting with a million handsets in four or five network locations and increasing this year to include up to 5 million handsets and expanding to 26 of its largest M&O networks. Now it's exanding further, to up to 40 million.
Hagan said the concept has been a subject of discussions for about a decade. What's changed now is that there's a huge ramp-up in mobile data traffic, which stresses the cellular networks. Networks are being densified; network nodes need to be deployed closer to the customers, and that involves using techniques such as distributed antenna systems (DAS), femtocells and picocells. In addition, spectrum is a limited resource, so much so that bidders spent more than $44.8 billion on the most recent AWS-3 spectrum auction.
Boingo has offload relationships with three of the four national U.S. carriers and isn't naming this particular customer. Boingo said the long-term agreement covers the carrier's entire smartphone customer base. The carrier will pay Boingo on a per-megabyte basis for the traffic it handles.
It's a big deal in the quest to make Wi-Fi roaming more like cellular. When the carrier's affected smartphone customers come into range of a Boingo Wi-Fi network, the system will automatically connect their device to the network--the end-user doesn't need to do anything.
It uses Boingo's Passpoint Secure network, which includes WPA2 enterprise-grade encryption technology. Passpoint is what enables the end-user to experience effortless and secure connections. Boingo says that, on average, Boingo Passpoint users connect to Wi-Fi three times more often than average users and stay connected three times longer.
Hagan also talked about Boingo's DAS business during the Deutsche Bank conference, noting that DAS is one method used to densify networks. Any big venue where people are congregating and trying to use a lot of data requires a combination of DAS and Wi-Fi, he said. Boingo approaches venues for the wireless rights, and once those are in hand, it reaches out to the big four U.S. operators. AT&T and Verizon have led nearly every DAS deal, either collectively or individually, that Boingo has done, he said.
Over time, the company worked hard to get Sprint, T-Mobile and regional carriers on board as well. In a master agreement that Boingo struck recently with an unnamed U.S. carrier, it did so with someone other than AT&T or Verizon. "It's with one of the other two," Hagan said.
For the first time in the company's--and probably the market's--history, "we're going to have someone other than AT&T and Verizon leading distributed antenna system builds, and it's incredibly exciting because imagine having T-Mobile or Sprint in a major high-impact venue having better service than AT&T or Verizon," he said.
"It's big from a market-dynamics perspective, because I find it hard to believe that the two big guys are going to let that last very long," he said, adding that it is likely to lead to more DAS business.
For more:
- see the press release
- listen to the webcast
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