Boingo Wireless Inc. is helping rural cellphone carriers take a load off.
The Westwood company that provides Wi-Fi hot spots in restaurants, malls, and airports last week announced a deal with Competitive Carriers Association in Washington, D.C., that will allow the organization’s members – rural and regional cellphone service companies – to “offload” some data onto Boingo’s wireless network. The value of the deal was not disclosed.
Wi-Fi offloading lightens the strain on a cell network by shifting data that goes through smartphones to high-speed wireless networks. It’s like relieving freeway traffic by moving some cars over to the diamond lanes.
Boingo has a network of 500,000 wireless Internet zones worldwide that people with phones, tablets or laptops pay for access; some sales are subscription, others are as needed. The company also makes money by selling ads on its log-in page.
This is the first deal Boingo has struck with U.S. cell networks to provide Wi-Fi offloading directly for cellphone customers. Previously, Boingo worked with major carriers Verizon Communications Inc. in New York and Sprint Nextel Corp. in Overland Park, Kan., to offer Wi-Fi access to subscribers who use laptops to connect to 3G and 4G networks.
The announcement made Boingo one of the top gainers on the LABJ stock index, with shares rising 7.7 percent for the week to close at $7.97 on Sept. 26 (see page 24).
Competitive Carriers represents more than 100 regional cellphone providers that mostly operate in rural areas around the country. These providers often struggle with the burden that smartphones place on their networks.
The offloading arrangement also helps phone companies extend their service area. That way, they avoid paying roaming charges to other carriers and passing those on to their customers.
Boingo declined to discuss any of the specifics on pricing for association members’ access to their hot spots, but said all carriers would be charged the same fee. Competitive Carriers executives couldn’t be reached for comment.
Christian Gunning, a Boingo spokesman, said the rise in smartphone use and the massive amounts of data these devices handle will become a problem for all cell networks.
Donna Jaegers, an analyst with D.A. Davidson & Co. in Denver, said offloading is a good fit for smaller carriers. But she isn’t sure the bigger networks have the same need to sign up for Boingo’s service.
“The carriers have to feel more pain before they’re going to pay extra for offloading,” Jaegers said.
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