The Next Big Wi-Fi Markets: Malls, Restaurants, Stadiums

Chicago's Soldier Field is one of Boingo Wireless' new Wi-Fi venues

In its 10 years of business, Wi-Fi aggregator Boingo Wireless has amassed a leading share in the global airport Internet business. Now the Los Angeles-based company, which went public on May 3, wants to grow by expanding into shopping malls, quick-service restaurants and sports stadiums and arenas.

Chief Executive Dave Hagan says these new venues represent greater opportunity for companies like Boingo, which sells software and services that connect people to Wi-Fi. Traditional Wi-Fi venues like hotels and airports have well-established networks and providers by now, explains Hagan. Places like stadiums, in contrast, are relatively new to Wi-Fi.

“No one carried their laptop into a stadium before,” notes Hagan. Instead, it is the rise of smartphones that is nudging stadium owners to deploy Wi-Fi.

Boingo has won a few notable contracts so far, including Chicago’s Soldier Field, where the Bears play. Hagan, who expects every stadium in the world to eventually roll out a Wi-Fi network, says the company will keep pursuing deals.

Shopping malls have a longer history of Wi-Fi, but often limit access to certain areas, like the food court. Boingo is selling Wi-Fi as a more pervasive form of connectivity. One advantage the company cites is the ability to offer coupons. Once a mall has high-quality Wi-Fi available throughout its premises, it can easily serve up targeted offers to shoppers via a “splash page” that users see when they log into the network, says Hagan.

Since those offers can pop up on shoppers’ cellphones, Boingo is counting on the excitement around mobile commerce and “daily deal” offers to convince mall operators to sign on. The company recently inked an agreement with Caruso Affiliated to bring Wi-Fi to Los Angeles’ popular mall, The Grove, and The Americana at Brand in Glendale, California.

Quick-service restaurants will likely be a tougher sell for Boingo. AT&T’s formidable Wi-Fi network already powers two of the largest restaurants in the U.S.: McDonald’s and Starbucks. Hagan, however, says the industry — outside those two chains — is fragmented and open to new entrants. “It’s rare to see a Wi-Fi provider that’s nationwide and ubiquitous across a particular restaurant brand,” he says.

In all these sectors, Boingo is aiming for a market share roughly equivalent to the share it boasts in Wi-Fi generally. That figure ranges from 25% in Europe to 43% in North America. “We won’t get [all the malls, restaurants and stadiums], but we’d like a nice chunk,” says Hagan.

The business will differ across the venues as some will be more likely to absorb the cost of providing Wi-Fi to consumers than others. Restaurants will supply Wi-Fi as a complimentary service and differentiation factor, says Hagan, while malls and stadiums will be more of a mix. Soldier Field, for instance, asks users to pay for Wi-Fi.

“The venues just have to decide on their strategy,” notes Hagan. “Do they see Wi-Fi as a revenue opportunity or an amenity?”