iPass Drops Prices

By Eric Griffith

October 15, 2002

Flat fees and per venue prices are out the door as the broadband wireless provider goes to a per-minute pricing scheme.

Citing the needs of the marketplace, Redwood Shores, CA-based iPass is changing its pricing plan. Effective November 15, 2002, all users of the service that connect via their iPassConnect smart client software will be charged by the minute for their Internet connections.

This new pricing replaces the fixed fee users are currently charged per every 24 hour period of service, even if they were only using a few minutes -- the "all-you-can-eat model." The problem with that plan for customers has been that most can not easily cram all their Internet surfing into a 24-hour period -- especially business travelers.

"A traditional enterprise traveler, going from, say, San Jose to Dallas, may check e-mail in the airports then go to the hotel and download," says Jon Russo, vice president of marketing at iPass. "In the original way, you got charged for each venue you were at. Maybe ten dollars each time.

"The approach we're using now is a per-minute basis. Now, instead of getting dinged at each venue, you pay by the drink. As we tested this, and it's just gaining traction now, [customers] seem to want to go that direction."

How much per minute depends on the corporate customer. iPass expects that such enterprises will see an immediate savings even if they have a few power users doing extended surfing, as the other users doing only occasional surfing will incur far fewer costs. iPass can give enterprise customers the ability to time out a connection (ala America Online) for users that seem to be over doing it. Russo says the company is considering, but has not yet developed, the ability to cap the usage.

"If we saw expensive usage, it might be paid by the minute to a point and then capped," says Russo. "We're in the tweener stage now-- between the early adopters and the general population. I wouldn't be surprised if the cap becomes more important in six months to year."

According to the release announcing the price change, iPass will be expanding its Global Broadband Roaming (GBR) network into Europe during the fourth quarter of 2002, and will expand to more points in the Asia Pacific region as well as North America. The GBR Network currently serves 100,000 wireline customers, and over 400 Wi-Fi hotspot locations around the world.

Eric Griffith is the managing editor of 802.11 Planet.

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