Portal Software Wednesday said it has sealed a deal to provide Wi-Fi
Cupertino, Calif.-based Portal did the same for wireless provider Mobile Star which, after suffering cash problems, was acquired by Deutsche Telekom-owened T-Mobile last year.
“We had to compete for this account twice,” said James Morehead, senior director for marketing at Portal.
T-Mobile’s hotspot’s show up in Starbucks, Borders Books, and American Airline’s Admirals Clubs. These are places where customer’s with Wi-Fi-enabled computers can get high-speed wireless Internet access.
But billing for these services presents special challenges which is where Portal comes in.
“A provider like T-Mobile will often see hotspot customers with whom they have no prior relationship,” explains Morehead. “They still need to provide service in minutes. We do all the leg work here, gather the customer information, set up the account, and process the payment.”
Alternatively, Morehead says these may be existing customers who want to see their hotspot charges show up on their voice bill. Other billing options such as pre-paid, or subscription services are possible.
And in some cases T-Mobile has revenue sharing relationships with the high-value location owners such as Starbucks. “We provide the ability to track and manage these relationships,” said Morehead.
“This is pretty standard,” said Phillip Redman, analyst with Gartner Inc. in Stamford, Conn. “Most of the major service providers outsource their billing.”
Overall, the hotspot market is not the major money-making machine everyone predicted.
Surveys from Gartner suggest that even though the number of “frequent” WLAN users in North America will shoot from 4.2 million this year to 31 million by 2007, the chances are slim that the providers of public access hotspots won’t see any profit until the audiences reaches that saturation point.
But that hasn’t stopped companies like T-Mobile from trying. The company currently outsources its voice billing to Chesterfield, Mo.-based Amdocs. Morehead said Amdocs was a contender to take over the Wi-Fi business as well.
“I think we won, because the switch would have involved a massive custom build,” he said.
He also said it is too early to predict the future of the Wi-Fi market.
“I think there will be a rush of providers trying to get in here, and many will get flooded out. Right now we have over fifty mobile service providers as customers. The majority of these are doing it as a defensive move, just to make sure they have a foothold.”
Portal’s other customers include thirty-five of the top fifty wireless carriers as well as organizations such as Vodafone, AOL Time Warner, TELUS, NTT, China Telecom, Reuters, Telstra, China Mobile, Telenor Mobil, Vivendi, and France Telecom.