Boingo said it has inked a Wi-Fi offloading agreement with a top U.S. wireless network operator that covers traffic in one major sports stadium, a first-of-its-kind deal for the company. The company declined to provide the identity of the wireless carrier as well as the location of the stadium.
"We're partitioning off part of the Wi-Fi [network at the stadium] for the carrier. So think of it as incremental capacity for them,” said David Hagan, Boingo’s CEO. "On this one, it's more of a specific trial in a large venue to see what the traffic looks like and how it works."
"The need for incremental capacity is the problem that we're solving,” Hagan said. He explained that Boingo operates both the Wi-Fi network and the DAS (distributed antenna system) network at the stadium, and the company’s new agreement with the unnamed wireless operator essentially allows that operator to offload excess wireless traffic from the stadium’s DAS network when it is overloaded and onto a reserved, unused portion of Boingo’s Wi-Fi network at the venue.
"Stadiums are the toughest venues to do,” Hagan added. “Nothing is as high density as a stadium. They have up to 100,000 people in them sitting hip-to-hip—that is the ultimate in density. And literally everyone in that environment is trying to do something on their phone."
This isn't the first Wi-Fi offloading deal for Boingo. Sprint in 2015 struck a multiyear Wi-Fi agreement with Boingo to seamlessly offload its customers' data traffic to Boingo's Wi-Fi networks at 35 major U.S. airports. Then, in August of last year, Boingo announced that it has launched a Wi-Fi offloading service with another major Tier 1 wireless carrier in the United States—although Boingo didn’t announce the identity of that carrier, it is likely AT&T.
Hagan pointed to Boingo’s latest Wi-Fi offloading agreement as evidence that the company continues to make progress in its efforts to grow its Wi-Fi offloading business. Hagan’s comments are notable in light of skepticism on the size of the company’s offloading opportunity among some Wall Street analysts.
Specifically, BTIG analyst Walter Piecyk wrote in a note to investors last week (reg. req.) that “the size of the WiFi offload opportunity has been limited, generating just $23.5 million of revenue in 2016E to Boingo. Bulls would argue that this shows how large an opportunity still exists, but we don’t believe our estimate of just 15% growth in 2017 in this segment trails consensus, despite the expected ramp of AT&T. We do not expect Verizon or T-Mobile to use Boingo for WiFi offload based on our past discussions with those companies.”
Article updated Jan. 9 to modify information about Boingo's offloading deal.