From a Sky Dayton (Founder and CEO of Boingo Wireless) interview…
There are four layers in the wireless industry. The first layer, at the bottom, is the real estate?the physical venues where hot spots are deployed. These are places like Starbucks and McDonalds, the Los Angeles Airport, Hilton Hotels, Shell Gas Stations. By their very nature, there are a huge number of these locations. In the United States alone, there are almost 2 million public spaces where hotspots could be deployed. And no one company has more than approximately one-tenth of one percent of that footprint. So it’s very fragmented.
The next layer consists of the companies that create hotspots and deploy infrastructure in those locations. So these are what we call Hot Spot Operators (HSOs), like Wayport, Surf and Sip, T-Mobile, Cometa, Toshiba, Azure, Pronto, NetNearU. There are over a hundred of these companies already, and that number is going to grow rapidly, because the barriers to entry for the business are very low.
The next layer above that is the aggregation layer. That’s what we do at Boingo—we take all of that fragmentation at the HSO layer and bring it together and provide software and roaming services that allow customers to move from network to network with the same account, the same brand. Those brands?ISPs like EarthLink and carriers like Sprint?are the final layer. They?re the companies that own the end user relationship. There are going to be many companies involved in the end user’s Internet connection, even if there is only one brand that appears to that end user.
So, that’s the current structure of the industry, and I believe that those lines of segmentation will become more and more apparent. And the competition is going to be fierce within each layer. But for the industry to be successful, there have to be thriving partnerships between each layer, and ultimately with the end user.