Wi-Fi Industry Basics

There are many reasons that Hot Spot Operators choose to partner with Boingo.

Tapping into Boingo’s reach
Through its partnerships with carriers, ISPs and hardware OEMs, Boingo has brought together the a large potential Wi-Fi user base, representing millions of potential users.

Boingo powers hotspot services for ISPs such as EarthLink, with 5 million active subscribers, and Fiberlink, which targets Fortune 500 companies and already has its software on hundreds of thousands of corporate laptops.

Boingo is bundled with new laptops from Sony and HP. Boingo also has bundling agreements with leading Wi-Fi card OEMs, including Linksys, SMC and Netgear, that together have over 60% market share in Wi-Fi cards, representing hundreds of thousands of units sold each month.

This means that Boingo has the potential to deliver significant traffic to hotspot operators over and above what they could generate themselves.


Driving Traffic
Boingo helps make hotspots known. Locations in the Boingo roaming network become part of Boingo’s hotspot database, which is regularly pushed out to thousands of Boingo software clients in the field and fed to Web site directories operated by Boingo and partners such as EarthLink.

Boingo also provides in-venue marketing materials, such as stickers, wall-hangers and counter displays to ensure visitors know that Wi-Fi service is available. This kind of visibility is key to utilization rate, and thus profitability.


Driving Profit
Boingo pays hotspot operator partners a wholesale fee for each connect by a user that is part of Boingo’s network. This fee is typically between $1.00 and $2.00 per connect day (up to 24 hours for one user in one location) and provides Boingo and its carrier & ISP partners enough margin to pay for all marketing, customer support, billing and other costs associated with obtaining and retaining a customer. Boingo also provides a bounty of between $20 and $50 for all sign-ups that occur in an HSO’s venue, whether through the HSO’s own splash page or through Boingo’s software.

As noted earlier in the section on hotspot economics, the single biggest driver of hotspot profitability is utilization rate – the percentage of venue visitors that purchase a connection. The costs of operating a hotspot are fixed. Thus, as soon as those fixed costs are covered by revenue, all incremental revenue past that point is profit. This is especially true when partnered with Boingo: not only does Boingo help an HSO reach breakeven, all revenue from Boingo past that point falls directly to the bottom line because the HSO doesn’t need to worry about marketing, technical support, billing, bad debt and other costs associated with retail customers.

Easy Integration
As noted earlier, Boingo does not require its HSO partners to use any kind of specialized equipment either at hotspots or in the back office. Boingo uses a completely standards-based approach, making integration with Boingo’s roaming system straightforward.

To make the integration process even easier, an increasing number of major OEMs are selling hotspot equipment with either Boingo’s Hot Spot in a Box™ technology or Boingo Ready™ certification – meaning that becoming part of the Boingo roaming system could be as easy as flipping a switch.

Hot Spot Critical Success Factors
There are a number of problems that will prevent a prospect from discovering and actively using a hotspot, all of which are effectively addressed by Boingo:

1. Make it VISIBLE -- This is obvious but rarely done. The existence of a hotspot must be actively promoted in the venue. The dynamic sniffer in Boingo’s client software instantly lets users know when a hotspot is available. Boingo also provides marketing materials to its HSO partners which proclaim loudly, “Wi-Fi here!”

2. Ease of use – Without Boingo, hotspots are too hard to access. The average user doesn't have the expertise to deal with codes like “SSIDs” nor to program his computer each time he wants to connect to a new Wi-Fi network, and will not have the patience to navigate through different splash pages in each hotspot he encounters. To solve this, Boingo’s software provides the easiest, most carefree hotspot experience in the world

3. Universal roaming – As noted earlier in the section on industry challenges, so long as hotspots remain fragmented islands, usage will remain low. People need to know that they can go to any hotspot and get connected, without having to get their credit card out each time. They want to subscribe to a brand they trust and have it work everywhere. The success of cellular and ATM machines demonstrates the potential of universal roaming amongst fragmented networks operated by different companies. With universal roaming, the result is a rising tide for everyone. Boingo brings this potential to Wi-Fi.

Please see the Hot Spot Operators section of the Boingo web site for additional information and contacts.

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