Building the Wi-Fi Roaming System Oh, and We LOVE 3G Telecosm 25 August 2003 Sky Dayton CEO, Boingo Wireless
Why all the fuss about Wi-Fi? <ul><li>Fast, short range networks </li></ul><ul><ul><li>11 Mb + on air link (actual speed d...
Wi-Fi chip commoditization <ul><li>2002: $16, 2003: $8, 2004: $4, 2006: $2? </li></ul>Worldwide Hot Spot Growth Source: Te...
More why Wi-Fi <ul><li>Cheap </li></ul><ul><ul><li>Wi-Fi cards are nearly free </li></ul></ul><ul><ul><li>Wi-Fi access poi...
Wi-Fi devices drive hot spot demand <ul><li>PDAs: HP, Toshiba, Palm </li></ul><ul><li>Cell phones </li></ul><ul><li>Cars <...
Hot spots appearing worldwide <ul><li>Wi-Fi Hot Spot Operators appearing worldwide </li></ul><ul><ul><li>Wayport, STSN, Su...
Hot spot projections Worldwide Hot Spot Growth 2,000 hot spots in 2001 growing to 300,000 in 2005  according to TeleAnalyt...
User projections Worldwide Hot Spot Growth Source: Gartner Dataquest (April 2003)
On the air in busy cities  today
Barriers to adoption <ul><li>Lack of ubiquity </li></ul><ul><ul><li>Not yet in all the right places </li></ul></ul><ul><ul...
Hot Spot industry segmentation Venues - Locations Hot Spot Operators - Networks Roaming Brands - End users
Boingo roaming system <ul><li>Over 2600 hot spots under contract </li></ul><ul><ul><li>17 countries </li></ul></ul><ul><ul...
Myth: “Hot spots can’t make money” <ul><li>Reality: Hot spots can make money quite easily </li></ul><ul><li>Economics of a...
Myth: “Wi-Fi will replace 3G” <ul><li>Reality: Wi-Fi will NOT replace cellular </li></ul><ul><ul><li>Wi-Fi is a LAN, not a...
What’s coming <ul><li>Hot spots will cover highest traffic areas </li></ul><ul><ul><li>Homes & Offices </li></ul></ul><ul>...
 
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Sky Dayton

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Sky Dayton

  1. 1. Building the Wi-Fi Roaming System Oh, and We LOVE 3G Telecosm 25 August 2003 Sky Dayton CEO, Boingo Wireless
  2. 2. Why all the fuss about Wi-Fi? <ul><li>Fast, short range networks </li></ul><ul><ul><li>11 Mb + on air link (actual speed depends on back-haul) </li></ul></ul><ul><ul><li>100-500 feet </li></ul></ul><ul><li>Free spectrum </li></ul><ul><ul><li>83.5 MHz in 802.11b/g </li></ul></ul><ul><ul><li>300 MHz in 802.11a </li></ul></ul><ul><li>Standard </li></ul><ul><ul><li>Innovation not bifurcated between CDMA and GSM </li></ul></ul><ul><ul><li>Massive competition and rapid commoditization of components </li></ul></ul>
  3. 3. Wi-Fi chip commoditization <ul><li>2002: $16, 2003: $8, 2004: $4, 2006: $2? </li></ul>Worldwide Hot Spot Growth Source: TechKnowledge Strategies, June, 2003.
  4. 4. More why Wi-Fi <ul><li>Cheap </li></ul><ul><ul><li>Wi-Fi cards are nearly free </li></ul></ul><ul><ul><li>Wi-Fi access points under $50 </li></ul></ul><ul><li>10MM’s user devices before networks even built </li></ul><ul><ul><li>First time in wireless history – no subsidy </li></ul></ul><ul><li>Millions of Wi-Fi networks being set up </li></ul><ul><ul><li>Private networks in homes and offices </li></ul></ul><ul><ul><li>Emerging -- commercial “hot spots” in public spaces </li></ul></ul><ul><li>Pent-up demand for fast access on the road </li></ul><ul><ul><li>36MM business travelers in the US, 27MM of which carry laptops </li></ul></ul><ul><ul><li>Access outside the office today is awful </li></ul></ul>
  5. 5. Wi-Fi devices drive hot spot demand <ul><li>PDAs: HP, Toshiba, Palm </li></ul><ul><li>Cell phones </li></ul><ul><li>Cars </li></ul><ul><li>Gameboys </li></ul><ul><li>Dell: all laptops by end of 2003 </li></ul><ul><li>Consumer electronics… </li></ul>
  6. 6. Hot spots appearing worldwide <ul><li>Wi-Fi Hot Spot Operators appearing worldwide </li></ul><ul><ul><li>Wayport, STSN, Surf and Sip, T-Mobile, Swisscom Eurospot, Monzoon, Attingo, Toshiba/Accenture, Cometa, Azure, Kast, Picopoint, Pronto, NetNearU, AT&T, SBC, Sprint, Verizon… </li></ul></ul><ul><li>Airports, hotels, cafes, campuses, convention centers </li></ul><ul><li>Low barrier to entry, intense competition </li></ul><ul><li>Driven by adoption of Wi-Fi in home and business </li></ul><ul><li>Capital markets are closed – no problem! </li></ul><ul><li>Speed and price per bit that 3G can’t touch </li></ul>
  7. 7. Hot spot projections Worldwide Hot Spot Growth 2,000 hot spots in 2001 growing to 300,000 in 2005 according to TeleAnalytics/ Wall Street Journal 10 March 2003
  8. 8. User projections Worldwide Hot Spot Growth Source: Gartner Dataquest (April 2003)
  9. 9. On the air in busy cities today
  10. 10. Barriers to adoption <ul><li>Lack of ubiquity </li></ul><ul><ul><li>Not yet in all the right places </li></ul></ul><ul><ul><li>5,000 US hot spot locations are live </li></ul></ul><ul><ul><ul><li>Tipping point at 10,000 hot spots in the right places </li></ul></ul></ul><ul><li>Fragmentation – Need for roaming </li></ul><ul><ul><li>Users need multiple accounts </li></ul></ul><ul><ul><li>Low barrier to entry & short range </li></ul></ul><ul><ul><ul><li>Unlike cellular, no one hot spot operator will own more than 10% of the ultimate footprint </li></ul></ul></ul><ul><li>Ease of use </li></ul><ul><ul><li>Still too hard to find and connect to Wi-Fi networks </li></ul></ul><ul><li>Lack of control </li></ul><ul><ul><li>Carriers can’t brand and control the user experience </li></ul></ul>
  11. 11. Hot Spot industry segmentation Venues - Locations Hot Spot Operators - Networks Roaming Brands - End users
  12. 12. Boingo roaming system <ul><li>Over 2600 hot spots under contract </li></ul><ul><ul><li>17 countries </li></ul></ul><ul><ul><li>30 airports with full or partial coverage </li></ul></ul><ul><ul><li>1300 hotels </li></ul></ul><ul><ul><li>Over 700 cafés </li></ul></ul><ul><li>40 hot spot operators </li></ul><ul><li>Rapid growth: +100% so far this year </li></ul><ul><li>Targeting 5,000 by end of 2003 </li></ul>Largest aggregated network Over 2600 hot spots
  13. 13. Myth: “Hot spots can’t make money” <ul><li>Reality: Hot spots can make money quite easily </li></ul><ul><li>Economics of a small café hot spot </li></ul><ul><ul><li>Costs: $150 per month to operate hot spot = $5 per day </li></ul></ul><ul><ul><ul><li>$100 for business-class DSL </li></ul></ul></ul><ul><ul><ul><li>$50 for capex/opex </li></ul></ul></ul><ul><ul><li>Revenues: Boingo settles $2.00 for each connect </li></ul></ul><ul><ul><li>300 people walk into café each day </li></ul></ul><ul><ul><li>2% utilization rate = 6 connects per day </li></ul></ul><ul><ul><li>= $12 per day/$360 per month </li></ul></ul><ul><ul><li>= 60% profit margin for hot spot operator </li></ul></ul><ul><li>Utilization rates will be much higher </li></ul>
  14. 14. Myth: “Wi-Fi will replace 3G” <ul><li>Reality: Wi-Fi will NOT replace cellular </li></ul><ul><ul><li>Wi-Fi is a LAN, not a WAN </li></ul></ul><ul><ul><li>3G ubiquitous, medium speed (100Kb), high cost </li></ul></ul><ul><ul><li>Wi-Fi in key high traffic hot spots, high speed (1Mb), cheap </li></ul></ul><ul><li>Reality: Wi-Fi challenges the 3G business case </li></ul><ul><ul><li>Highest traffic locations favor Wi-Fi </li></ul></ul><ul><ul><ul><li>Where Wi-Fi shines </li></ul></ul></ul><ul><ul><ul><li>Where spectrum scarcest </li></ul></ul></ul><ul><ul><ul><li>Offload traffic to Wi-Fi </li></ul></ul></ul>
  15. 15. What’s coming <ul><li>Hot spots will cover highest traffic areas </li></ul><ul><ul><li>Homes & Offices </li></ul></ul><ul><ul><li>Airports </li></ul></ul><ul><ul><li>Hotels </li></ul></ul><ul><ul><li>Convention centers </li></ul></ul><ul><ul><li>Cafes </li></ul></ul><ul><li>Wi-Fi challenges the original business case for 3G, but it doesn’t replace it </li></ul><ul><ul><li>3G is critical for ubiquitous coverage </li></ul></ul><ul><li>BOTH will thrive </li></ul><ul><li>First to integrate both will be huge winners </li></ul>
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