|Boingo Wireless US WiFi Coverage Map|
Boingo has 325,000 WiFi hotspot locations throughout the World and WiFi is growing more quickly than 4G cell towers. On top of this carriers are adding 25X more WiFi access points than cell towers because they are starting to doubt the capabilities of overhyped 4G. However, I do think Boingo Wireless will need to find more efficient and creative ways to get subscribers through advertising.
The growth opportunities are tremendous as connectivity to high-speed broadband must continue to fragment. WiFi adoption has some challenges that primarily stem from the awareness that these networks exist via marketing. Boingo is also competing against carriers that are spending hundreds of millions of dollars per year in advertising and generate hundreds of billions of dollars in revenue by locking in their customers to fraudulent phone contracts. These carriers want you to believe that 4G and 3G is more reliable than WiFi and we all know this is a bogus marketing message. Don't believe the carrier hype because the carriers are going to fall on their face trying to stuff too much data on their 4G networks and WiFi will ultimately be more reliable. Not only that but consumers will be required to buy new phones because their old phones will not work on 4G LTE. So does Boingo Wireless even have a chance to compete in the marketplace having a fraction of the capital and resources to compete?
I have no doubt that public and ad-supported WiFi can be the future of communication and not just for offloading data from the congested 3G and 4G networks. We think 4G is overpriced and competes with WiFi despite what the big carriers AT&T and Verizon might want you to believe. (NYSE: T) and (NYSE: VZ). Companies like Google (Nasdaq: GOOG) are monitoring the mobile location-based advertising space and will pounce on any opportunities to create their own network or buy a company like Boingo to create free ad-supported wireless. Google is the only company that has the advertising infrastructure to sell location-based mobile ads on a global scale.
As a contrarian, there is another reason to believe that Boingo will be successful long term. No one in the telecom industry believes in WiFi for the wrong reasons and thinks ad-supported WiFi cannot be successful because of failures in the past. However, as location-based advertising CPMs (cost per thousand) and mobile ad conversions to sales go up it will start to compete. Also, companies like Google Voice and Skype are getting more reliable at VoIP and provide the capability to make voice phone calls over WiFi.