The Little Wireless Train That Could

Wi-Fi on trains seems like such a natural. You have a captive audience of passengers with time on their hands. Many are business people or students toting laptops or PDAs to and from work or school, or on business trips. Of course they want to access the Net.

Despite the natural fit, it has taken awhile for Wi-Fi on the rails to really get rolling. There are signs now, though, that it’s picking up speed.

Pioneer PointShot Wireless, a Canadian company currently operating on-train Wi-Fi trials with three rail operators in North America, recently announced a partnership with transportation industry systems integrator Parsons Corp. Under the agreement, the two will jointly develop a comprehensive Wi-Fi platform for both public access services and internal train operator applications.

“One of the things that has held up North American deployment is finding a partner that really gets the business model for Wi-Fi on trains,” says PointShot president and CEO Shawn Griffin. “Parsons does.”

PointShot will continue to provide its satellite and cellular-based on-train Wi-Fi systems. Parsons, which develops and markets back office computer systems for rail companies and also provides IT outsourcing services, will be PointShot’s customer and the direct marketing interface with rail operators.

The two will likely work together on operator applications such as e-ticketing. E-ticketing would allow passengers to get on a train without a ticket and buy one onboard. Transaction data could then be transmitted instantly over the Wi-Fi-satellite-cellular network to update central reservations and billing systems.

Many train operators also offer online and call center systems customers can use to find out if trains are on time. Currently they rely on train crew calling in to report their location and progress. The PointShot technology could automatically transmit location information to update these systems using cellular triangulation or GPS.

The market opportunity in Europe, meanwhile, where distances are shorter and train travel is a bigger part of the business travel culture, is moving ahead faster. The big news recently was PointShot competitor Icomera, a Swedish company, announcing a $14.5-million deal with the Swedish rail operator SJ. Icomera will put Wi-Fi systems on the company’s 85 trains.

“That’s a significant chunk of change,” Griffin says of the SJ deal. “It gives some idea of the scale of revenue that is possible.” The Icomera deal is just “the tip of the iceberg,” he adds. The market in Europe is hot. Griffin recently attended a conference in Germany devoted entirely to Wi-Fi on trains.

“All of the European rail operators are looking at this now,” he says. “They’re all in the process of trialing or they have RFPs [Requests for Proposals] out. It’s a very strong market. Most operators in North America are looking at it too, but the Europeans at this point seem to be more in earnest.”

PointShot is working with UK broadband services provider Broadreach Networks in a project to put Wi-Fi access systems on trains owned by Virgin Trains and two other European train operators, as well as in 300 train stations across Britain. Broadreach’s Connected Carriage service was held up until recently by regulatory snags, but the PointShot technology has now been certified for use on trains in Britain and Broadreach expects to begin its roll-out in Q1 of 2005.

In North America, PointShot has been working with the same three rail operators for over a year now—Altamont Commuter Express (ACE), Capitol Corridor, both in the San Francisco Bay area, and Via Rail in Canada.

Ace was the first train operator to offer a Wi-Fi Internet service on its trains. It is currently running a pay-per-use trial—unlike the other two which offer service for free. Ace has Wi-Fi-equipped trains on all three of its routes and offers Wi-Fi access in its stations as well.

“ACE looks at this as a service that attracts more passengers,” Griffin says. “They’re fully rolled out, fully committed.”

Capitol Corridor will now become a Parsons customer, with PointShot continuing to provide the Wi-Fi systems. The train operator will put Wi-Fi on more trains this year, though it’s not clear how many more, Griffin says. At this point, it only has one set of Wi-Fi cars, which it cycles from route to route on a daily basis.

“The single biggest issue with the Capitol Corridor deployment was passengers’ inability to find out if Wi-Fi was on the train they chose,” Griffin says. “People loved the service but couldn’t depend on it being there.”

Via Rail is apparently also on the point of moving forward. It is currently running a trial that offers free Wi-Fi service in First Class carriages running along the main rail corridor between Toronto and Montreal.

“We can’t say anything right now, but we think we will have some good news on [Via Rail] in the next couple of months,” Griffin says. “They love the service. They’re talking about lots and lots of [internal] operator applications [using Wi-Fi]. They would love to see it rolled out across all their trains.”

Griffin won’t comment on prospects for new customers, but notes that even one fleet-wide sale to a European operator would be significant. He is confident PointShot will win its share of European business despite Icomera drawing first blood. It was a foregone conclusion that the SJ business would go to Icomera since both are Swedish companies, he says. The good news is that the SJ deal should open the floodgates.

“Once one commits and shows it can make money doing this, others will follow,” Griffin says.

Icomera and PointShot are so far the only two companies deploying railway Wi-Fi systems. Both are start-ups dedicated to Wi-Fi on trains, although PointShot has also flirted with Wi-Fi on buses. Both use similar technology—a communications server inside the train that provides last-10-meter connectivity using Wi-Fi, plus an antenna cluster on the car roof that relays upstream signals via cellular and downstream signals via satellite.

Griffin claims PointShot exploits the superior performance of satellite more than Icomera. His company also has a slightly different business model, preferring to work with service providers and just be a technology supplier, where Icomera functions as service provider as well.

“We figure the world doesn’t need more service providers,” Griffin says, “which is why we’re working with Broadreach in Britain, for example.”

Other companies have said they were going to do Wi-Fi on trains, he points out, but none has so far. Successes like Icomera’s with SJ will bring new competitors into the market, he acknowledges, but PointShot and Icomera have a long head start on developing technology and applications—and getting their technologies certified for use on trains.

For all the signs of progress, Wi-Fi on trains still has a way to go. PointShot and Icomera have proven the technology, and proven demand for the public access service exists. Despite the $14.5-million breakthrough with SJ, though, nobody has proven the business case for such systems to train operators yet.

PointShot has solid backing from U.S. and Canadian venture capital firms, and Griffin claims they’re happy with the company’s progress—”to the extent any venture capitalist is ever happy.” Still, we’re guessing PointShot needs a big deal for a fleet-wide deployment, and sooner would be better than later.

Get the Free Newsletter!

Subscribe to our newsletter.

Subscribe to Daily Tech Insider for top news, trends & analysis

News Around the Web