How iPass & 60M Hotspots Could Disrupt the Mobile Industry
As a consumer, you'd be forgiven for not knowing the brand iPass. Unlike WiFi hotspot aggregator Boingo, iPass doesn't do any direct-to-consumer business. But with almost 60 million WiFi hotspots across the globe (roughly half in the US), the company is a serious player in the increasingly heterogeneous wireless networking world.
Here's what iPass Inc. (Nasdaq: IPAS) offers: WiFi access around the world through partnerships with carriers and venue owners; automatic connections to the best hotspots available; WiFi security not guaranteed on typical public hotspots; and predictable costs for business customers. Any business that signs up gets licensed access to the service for its employees with availability through the iPass app on Windows, Mac, Android and iOS devices.
iPass has flown largely under the radar because it hasn't been entirely successful in its 20-year history. In fact, iPass hasn't recorded growth in almost 10 years, and its revenue dropped precipitously from nearly $70 million in 2014 to less than $63 million in 2015. However, the company has made some dramatic shifts recently – including bringing in a new CEO – and it's positioning itself well in a wireless market that's hungry for new choices and flexible service plans.
Since a change in executive leadership in 2015, iPass has made three key strategic moves. First, it opened up its service plans to offer unlimited data, which is attracting new customers. Second, the company created the SmartConnect software development kit (SDK), which gives developers WiFi tools to integrate into their own devices and applications. And third, iPass has signed new partnerships with companies addressing the consumer market -- from device makers like HP Inc. (NYSE: HPQ) to technology companies serving telecom carriers like Tata Communications Ltd. .
"We're very confident that we're going to have the first growth year that the company has had almost in a decade," says iPass CEO Gary Griffiths. "And we're very, very excited about the prospect of being profitable this year, which will be the first time ever."
iPass is scheduled to announce earnings for the second quarter on August 3.
iPass has some bold plans for the future too. The company is collecting data on things like access location, signal stress and connectivity success rate, and it's starting to explore how it could use that data for new revenue streams. Griffiths says there's a lot of interest in using information on WiFi connects as a proxy for foot traffic at venues like amusement parts and shopping malls. The company isn't forecasting any revenue from big data services in 2016, but Griffiths believes analytics offerings could make a substantial contribution to the business starting in 2017.
From an industry perspective, iPass also offers the potential for more non-incumbent wireless service providers to enter and disrupt the market. According to the National Cable & Telecommunications Association (NCTA) , the Cable WiFi Alliance just reached a total of 500,000 hotspots in its network, and Comcast Corp. (Nasdaq: CMCSA, CMCSK) is boasting more than 15 million hotspots even as it strategizes on a way to combine those hotspots with possible new mobile spectrum assets. (See Comcast Could Be Your Next Mobile Provider and US Cable WiFi Hotspots Near 17 Million.)
Any cable operator that partnered with iPass could massively extend its reach and give itself a leg up in competition with traditional mobile carriers.
The same is true for any internet company -- like Alphabet Inc. and its subsidiary Google Fiber Inc. -- with ambition to deliver wireless broadband services. (See Google Fiber Buys Webpass in Wireless Play.)
As Griffiths puts it, iPass is in an enviable position now that it's done the hard work of creating a global footprint that ensures secure and consistent WiFi access.
In a parting note he adds, "We're very happy we started down this path when we did."
— Mari Silbey, Senior Editor, Cable/Video, Light Reading