SANTA CLARA, Calif. — In a business model reminiscent of the early 90s, wireless software player Boingo said it is looking for a few good hotspot operators.
But unlike its past deals with FatPort and Wayport, Santa Monica, Calif.-based Boingo said it has a way to let average people turn their broadband access points into a moneymaking opportunity using its aggregation software and a truly grass roots effort.
And because of Wi-Fi’s inherent low barrier to entry, a typical system could cost as little as $500 for Boingo’s Colubris CN300 – Hot Spot In A Box, not including Internet access. Boingo said its second-generation version is due out next year with a $300 price tag.
“It’s like the early 90s all over again, said EarthLink founder and Boingo CEO Sky Dayton during his keynote address at the 802.11 Planet Fall 2002 Conference & Expo. “Hot spots are appearing worldwide. Grassroots organic growth and media attention have helped make the term “Wi-Fi” a household word. And justifiably, because Wi-Fi is the first revolution in Internet access since the commercial Internet launched.”
Hotspots are Internet access points that use wireless technology known as 802.11 or Wi-Fi
“The equation is number of Wi-Fi devices multiplied by the number of hotspots multiplied by market awareness – which we are creating – and you have traffic and revenue,” said Dayton. Currently, only a small number of people are making any money off of this and it will be some time before consolidation from larger players takes over.”
However, he warns that the Wi-Fi industry is still in its earliest stages with many challenges and questions about its development. Dayton’s recommendation is to overcome roaming, ease of use, security and user education problems before Wi-Fi can achieve its true potential.
“When we do, we’ll quickly hit a tipping point that will make Wi-Fi ubiquitous,” he told internetnews.com.
Part of Boingo’s strategy includes its Hotspot In A Box platform, launched earlier this summer as well as a list of the first products to be certified as Boingo Ready from industry leaders Colubris, Nomadix and Vernier Networks.
The company’s plan is to drive additional foot traffic to hotspots and pays access fees to the Hot Spot Operator whenever members connect. Hot Spot Operators who install Boingo Ready devices can also receive cash bounties when new Boingo subscribers sign up for service in their hot spot. Boingo handles the provisioning, authentication, marketing, billing and support costs for its members.
Dayton even suggested that Boingo’s Hot Spot Operators didn’t have to use their own equipment, which he said would create some interesting partnerships between a shopkeeper with a T1 line and a Wi-Fi savvy entrepreneur.
“We talked to a number of people about what they wanted in Internet access and they all said they wanted higher speed and wireless access,” said Dayton. “In fact our studies show 97 percent of business travelers will plan travel around high-speed access. That alone should be a wake up call to hotels and convention centers.”
But if you think the ISPs like Earthlink and AT&T Wireless are crying foul over Boingo’s middleman scheme, you’d only be half right.
Dayton says carriers barely object to the idea because they get a share of the profits too and the added value is that 802.11 technology will fuel more broadband access as well as upgrades from basic services to business class services complete with service level agreements and dedicated access.
Earlier in the day, Wi-Fi Alliance chairman and Intersil Strategic Marketing Manager Dennis Eaton also said Wi-Fi is perfect for building more broadband access and filling in holes for 3G networks. Currently analysts predict the current $2 billion Wi-Fi industry should expand at a compounded growth rate of 30 percent to nearly a $6 billion industry by the end of 2005.
At that rate, no one will be dismissing Wi-Fi as a niche technology or as a money-losing business plan.
