June 12, 2002
Want to plug in your hotspot to a big national WISP aggregator? There are technical hurdles along the way, but by and large the door is open. Most are eager to plug busy WISPs into their networks.
You've got your public hotspot up and running, and you even have folks logging on -- but you want more. You want to sign on with one of the big national aggregators, to tap into the big user pools being built up by companies like Boingo and iPass.
This may be the easiest club you've ever tried to join.
"It is not too difficult at all," said Monica Paolini, a consultant at Analysys Consulting. "Boingo, iPass and all these other companies are looking aggressively to expand their footprint, since that is key in their ability to capture new customers."
It's not a free ride, of course. There are some technical criteria, and money is probably going to change hands, though the rules for who gives and who receives are far from set in stone at this point. The overall principle, however, is clear at this point: If you think it is worth your while to join one of the WISP aggregators, they will be more than happy to have you.
Certainly there are startup costs involved, "and you as the entrepreneur really have to do the math. You have to do the return-cost estimate of how you will get the money back," said Christian Gunning, director of product management at Boingo Wireless.
For the folks at Wayport, the decision to team with multiple hotspot aggregators was effectively a no-brainer.
Wayport already has deployed the largest high-speed wired and wireless network in the hotel and airport industry, reaching some 100,000 direct customers a month. Teaming with the aggregators took some negotiating on both the business side and the technical front, but the growth potential more than justifies the effort.
"We work out roaming agreements on a per-connect basis with certain levels of commitment," explained Wayport VP of Marketing Dan Lowden. "They make certain commitments to us in terms of marketing and sales, and we commit to them with various levels of access and support. Once we reach those terms, they typically have a client software that their customer uses, and we set ourselves up to recognize that person as, say, an iPass customer. We can then send a quick query to iPass to make sure it's a valid user, then we drop the firewall and bill iPass at the end of the month.
"It is working out extremely well," he said.
For an operation of Wayport's size, it was relatively easy to overcome the two big technical issues that aggregators want addressed, namely billing and authentication. "The two technical teams need to work together" to ensure smooth system integration, "but it can be done in 30 to 45 days," said Lowden.
For smaller hotspot operators, however, the need for seamless billing and authentication can present a larger hurdle."On the mom-and-pop side, you need to have some technical sophistication," said Paolini. "It takes five minutes to put up a working access point to give people free access. But if you want to install the software that you need [for seamless connections], that is something most mom-and-pop operations will not be able to do themselves."
To clear the hurdle, hotspot operators can outsource the work, or else contract with an aggregator to acquire the needed technology through that aggregator.
Is it worth the effort? That depends on who you are and what you are trying to achieve.
"It definitely makes sense that some of the smaller hotspots want to partner with some of the larger aggregators," said Greg Collins, director of the analysis firm Dell'Oro Group. "But you have to do the cost-benefit analysis. Are the fees that the aggregators are charging worth the additional business you will generate by belonging to the consortium?"
If the numbers are close, some say, it may be worth diving in today.
As hotspot operators wait for the demand for mobile access to reach critical mass, Collins suggested, the early entrants will most likely be the ones to grab significant market share before the latecomers start squabbling over the crumbs.
Suppose a small hotspot operator does the math and decides to move ahead with an aggregator partnership. Is the door really wide open? While it's true that the aggregators will pretty much take all comers, it also is fair to say that small operators may have to stand at the back of the line for a while.
"The bigger the better," said Clark Dong, CEO of solutions provider and network aggregator hereUare. Because it takes some work to integrate an operator into the wider system, "somebody with five locations is less interesting to us than somebody with 500 locations."
That said, Dong still encourages solo operators to consider joining a wider network. "After all, your back-office costs are for the most part fixed," he said. "You pay whatever for DSL and in almost all situations your network will be underutilized. So any incremental traffic you can bring in right now is a net directly to your bottom line. It is all gravy. You want to cast your net far and wide in order to catch as much network usage as possible."
A recent announcement from Boingo may help some smaller operators to decide in favor of signing on with an aggregator. Last week, the firm released its "Hot Spot in a Box," an $895 solution that aligns a hotspot's billing and authentication protocols with those used throughout the Boingo network.
"It is pre-configured, it automatically talks to our back end," said Gunning.
With such solutions coming onto the market, analysts predict, operators soon will come to find the prospect of aggregation easier, cheaper and a lot more tempting overall.