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June 24, 2007

Boingo Is A Huge Threat to Mobile Operators – Flat-rate Plan Raises the Stakes

Boingo’s new worldwide WiFi roaming plan allows unlimited access through any of its 100,000+ hotspots worldwide for a flat monthly fee of $39 or €29. According to the International Herald Tribune, the plan’ll be announced tomorrow (Monday, June 25). Flat-rate pricing helped Internet usage explode a decade ago and it’s likely to be a huge boost to mobile WiFi use as well – especially at this low price.  Many airports and some hotels charge almost this much for one day of usage.

Roaming WiFi is a competitor to the plans of the world’s mobile operators to payoff their huge investment in 3G technology by selling mobile data services. Right now mobile data service – like the Verizon $59.95 unlimited plan which I use in the US – have better coverage in any one country than Boingo does.  The Verizon service, however, works almost nowhere outside the US.  GSM-based mobile data plans can work outside the host country but are subject to huge per minute roaming charges.  The Verizon plan requires that I be an existing Verizon Wireless customer AND a two year commitment.  The Boingo plan can be canceled at any time; for now I’ll probably just use Boingo in months when I plan to be traveling outside the country.

The race is to see whether Boingo can bring up enough affiliated hotspots so that their service is competitive in availability with the data services of the mobile operators.  Most Boingo hotspots are actually operated by affiliates like BT, EarthLink, Verizon Business, Telecom Italia, and a host of no names. If you’ve used WiFi services provided by a hotel, there’s a good chance that it’s either provided by or affiliated with Boingo. You might not have had to pay the hotel if you had a Boingo account.  Boingo is particularly strong in airports.

Last month Boingo announced a deal with FON which will add the 130,000 (and growing) Fonero-operated hotspots to the Boingo network. Many of these are NOT strategically located but Boingo revenue may convince more people to become Foneros and open up their WiFi connection.  Putting two big networks together can be a very big deal!

Boingo is also making a direct assault on the voice business of the mobile carriers – especially the lucrative roaming portion (the expensive part if you’re the one roaming). For just $7.95/month, you get unlimited use of a subset of the Boingo network for handheld connectivity – the most obvious application is VoIP. You need to have a mobile phone which supports WiFi (but you will have this soon).  Unless your phone or PDA is preconfigured (not many are yet), you need to download and install some Boingo software. It’s also possible, if you got your phone from a carrier, that it has been locked against this use. After all, you need to be protected from making 2 cent per minute international VoIP calls when you could easily be making $2 dollar per minute roaming calls.

A list of phones Boingo believes this will work with is here.  Somewhat tongue-in-cheek, the Boingo site says:

“In the future, more Wi-Fi enabled devices — mobile/cellular handsets, VoIP phones, mobile gaming consoles, MP3 players and digital cameras — will be available with Boingo Mobile service. Contact your mobile/cellular provider if you'd like Wi-Fi roaming services on your phone and they don't currently offer it.”

My guess is your mobile/cellular operator will hang up on you when you make this request.  But Boingo may have the last laugh.

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