Boingo Wireless:802.11b Wi-Fi Aggregator Business Model Analysis

Imagine this: you plop down at a table in your favorite coffee shop, flip the power switch on your laptop computer, a click here, a click there, and you're communicating with others or surfing the Web - without any wires. This is not a scenario from the future; it's Wireless Fidelity - a phenomenon commonly known as Wi-Fi.

Wi-Fi aggregators represent a new breed of companies. This case study lays out the different facets of a Wi-Fi aggregator's business model. In particular, we examine a leading aggregator called Boingo Wireless. At the end, we challenge the reader to think of what they would do if they were running this company and how they would position it for success.

Case Highlights:

• Wi-Fi or Guerilla Networks is one of the hottest phenomena in mobile technology today. As mobile operators around the world struggle with making the transition from 2G to 3G or "third generation" technology, this wireless technology is quickly filling the customer need for mobile access to the Internet.
• Boingo Wireless is a provider of Wi-Fi services, enabling access to the Internet via wireless Local Area Networks (wLANs) located in various "hotspots" across the country, such as airport lounges and cafes. We believe on-the-move users, especially traveling businessmen, will embrace Wi-Fi services for high-speed wireless data services.
• Boingo is an early market leader in the emerging Wi-Fi data services market. Boingo's founder, Sky Dayton, founder and current chairman of Earthlink, and board members, which include John Sigdmore, CEO of MCI-WorldCom, are seasoned entrepreneurs with an unparalleled experience in the telecommunications space.
• We believe Boingo's Wi-Fi aggregation business model, with low cost and high value proposition, uniquely positions the company to benefit from the growth of the Wi-Fi market. Boingo does not own a single wLAN network. Instead, it aggregates these networks provided by various "microcarriers" by providing a single point of access to them.
• With a sound business model, Boingo should make a perfect acquisition target for mobile carriers in the next 2 years. This should be the case particularly if 3G does not happen on time, and Wi-Fi continues to fill in the mobile corporate users' wireless data services needs. Sprint PCS is already an investor in Boingo, making it a likely interested party. Earthlink is another interested party.

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