Boingo Wireless is still in the early days of rolling out carrier Wi-Fi offloading with Sprint (NYSE: S), but its Wi-Fi technology is on about 10 million handsets today, growing to 40 million, including some of Sprint's other brands like Virgin Mobile.
At the Jefferies TMT 2015 conference, Boingo CEO David Hagan reiterated that Boingo is working with Apple (NASDAQ: AAPL), Microsoft (NASDAQ: MSFT) and Google (NASDAQ: GOOG) to get Passpoint certified on their handsets. Right now with Sprint, it's only on Android, and Apple represents about 12 million of its handsets, so once it gets Apple certified, "that'll launch that 12 million handsets, so lots of operational and engineering work going on right now with the carriers."
In terms of other carriers coming on, "I find it hard to believe that not all carriers at some point will be doing carrier offload," he said, noting that some folks heard Verizon's (NYSE: VZ) EVP and wireless/wireline division operations president John Stratton speak at the same conference earlier in the day, and "he said it's certainly in their plans. That's actually a headline. Verizon has been of the carriers, probably the most negative on Wi-Fi, so the fact that publicly they said 'we like Wi-Fi,' I take that as a win. I don't think that means they'll be offloading tomorrow, but I take that as a win and something we can certainly work with them on."
Boingo has relationships contractually now with three of the four biggest U.S. carriers, leaving only one with which it doesn't have a financial structure in place. "So the time to get to market, the contracts are in place. Once we get handset certification from Passpoint, that will be done. So we're removing the road blocks to making this happen quickly," he said.
Earlier at the Jefferies conference, Stratton, on the heels of Verizon's news about buying AOL for $4.4 billion, was asked if he anticipates more of a Wi-Fi offload strategy as the company develops more video content. Video is the big driver of consumption over Verizon's LTE networks.
"Listen, we think that Wi-Fi offload is an important part of the overall delivery method for customers," Stratton said, according to a transcript on the company's website. "Different carriers have different thought processes about how aggressively they pursue it. What I would say is this. Our job is to drive the growth of our business broadly. One of the critical levers, of course, is data consumption by our customers as they are increasingly hungry to do more and more in the mobile environments. The key for us is to make sure that we create value in the process of delivering that. So focus on raising the top line while we reduce the cost of delivery is obviously the most important piece."
Stratton emphasized that the main impetus behind Verizon's purchase of AOL is the company's ad platform that Verizon believes will help it generate revenue "above the network layer." He also said that the company is laser-focused on delivering a mobile-first video experience targeted at millennials because it believes they consume video very differently. AOL's ad platform, as well as other Verizon acquisitions including its January 2014 purchase of Intel's OnCue platform, will help Verizon fulfill its vision.
In his remarks, Hagan noted that densification in wireless networks continues to be a big trend. Boingo is seeing continued demand for its distributed antenna systems (DAS) that are deployed in big venues like stadiums.
He also noted the anticipation leading up to its first real carrier Wi-Fi offload deal with Sprint. When a Sprint customer walks into a Boingo hotspot, "a little magic sauce" on the handset automatically connects it to the Wi-Fi network, and everything they do from a data perspective then goes over Wi-Fi and Sprint pays Boingo on a per-megabyte basis. "So true offload, meaning the customer doesn't have to do anything," he said.
It's been a long road, but Hagan said he's gratified to see how the Wi-Fi industry has evolved. When Boingo started the company in 2001, the technology was called 802.11--Wi-Fi wasn't even a buzzword at the time.
"We've been fans of Wi-Fi before it was called Wi-Fi," he said. Wi-Fi was seen as "the ugly child who couldn't get picked for a sports team." But looking at the stats today, there's more data going over Wi-Fi than there is going over cellular, so "clearly, we have arrived" as a technology. The commercialization is still lagging behind the technology, so having the first "true carrier offload deal with Sprint is "amazing," he said.
"It's great to see the industry is finally moving toward truly integrated converged networks. The consumer doesn't care, they just want the best network for what they're trying to do and where they're trying to do it," he said.
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