Boingo acknowledges suitors, but hires former AT&T exec to lead strategy

Boingo has hired former AT&T exec Michael Zeto as senior vice president of global strategy and emerging businesses.(Getty Images)

Boingo Wireless CEO Mike Finley Tweeted that the company has hired Michael Zeto as senior vice president of global strategy and emerging businesses. Zeto had previously been with AT&T for six years where he was most recently vice president of IoT solutions and the general manager for smart cities.

Zeto’s LinkedIn profile says he will lead global corporate strategy at Boingo, responsible for creating new revenue streams and business models that contribute to profitable growth. He will work closely with Finley to drive innovation across 5G, CBRS, Wi-Fi 6 and IoT.

In December, Boingo disclosed that it was chopping 16% of its workforce, or about 80 employees, as part of an effort to increase profitability. In a statement at the time, the company said its business has changed significantly over the past few years, with the growth of distributed antenna systems (DAS), carrier offload, and the building-out of coverage on military bases and in multifamily dwelling units. Yet key parts of the organization were still aligned around what it considers legacy products, such as retail Wi-Fi and advertising.

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RELATED: Boingo cuts 16% of workforce as part of restructuring

Last month rumors surfaced that Boingo was contemplating a potential sale after it was approached by an unspecified buyer.

Boingo suitors

On its fourth quarter 2019 earnings call this week Boingo confirmed that it has received multiple inquiries for a potential sale or other strategic transaction. It has hired an advisor to assess the opportunities. “We see Boingo as a valuable collection of assets that would be appealing to a variety of buyers including tower companies, infrastructure funds, private equity, and others,” said Jefferies analysts Kyle McNealy and George Notter in an investor note. “However, we don’t get the sense that they’re motivated sellers or that there is any urgency for a sale – particularly around the low price level the stock’s recently traded at.”

Boingo has, however, suspended forward-looking guidance as it assesses the inquiries for a strategic transaction.

For its full year 2019, the company reported revenue of $263.8 million, an increase of 5.2% compared to $250.8 million in 2018. Growth was driven by strength in military/multifamily and DAS. But it reported a net income loss of $10.3 million for 2019 compared to a net loss of $1.2 million in 2018.

The Jefferies analysts said, “We think trends will snap back again once there’s clarity on the final disposition of the T-Mobile/Sprint deal and M&A related spending freezes are lifted.” 

Boingo is one of the largest providers of indoor wireless networks, and its footprint of cellular DAS, Wi-Fi and small cells reaches more than a billion people annually. The company says it’s the largest operator of airport DAS and Wi-Fi networks in the U.S.

In a conversation earlier this year with Boingo CEO Mike Finley, he said, “We build networks. Take an airport that wants to provide connectivity: We win the rights to provide wireless connectivity. Originally that would have been just Wi-Fi. As technologies have evolved, that’s also included building cellular networks and integrating those technologies together. On the cell side, we work as neutral host provider. We can provide Verizon, AT&T, Sprint and T-Mobile together and also integrate Wi-Fi.”

Finley added that, “5G is fantastic for us” because the technology will need to be added to all Boingo’s current locations at airports, stadiums and transport hubs. And he said adding 5G is complicated when dealing with different carriers that use different spectrum. “But complication is really good for us," he said. “There are not many entities that take all these complexities and make them work.”

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