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IPass Swallows GoRemote

Remote corporate connectivity provider iPass Inc. (Nasdaq: IPAS) has bought major rival GoRemote Internet Communications, Inc. for $76.5M in cash, a move that could indicate a period of increased pricing competition and consolidation in this emerging market. Remote access to the corporate network over wireless LAN hotspots has been a new development over the last few years. Companies like iPass, which initially sold a dial-up service, have added wireless LAN to the mix, creating a secure laptop client and a network of certified hotspots that business travellers can use to access the Web and corporate networks.

Up until now, iPass has largely grown its network through partnership and roaming deals claiming that its subscribers can access more than 35,000 hotspots in 51 countries. (See iPass Claims Milestone.) The firm is partnered with major U.S. hotspot operator T-Mobile USA, as well as a number of carriers worldwide.

IPass says that the GoRemote (formerly GRIC Communications) buyout will allow it to grow its customer base in the retail and branch office market, and allow it to move away from its legacy dial-up business faster. As well as building out a hotspot network, GoRemote has recently been working to aggregate DSL and other wired networks into its access portfolio.

In addition to WLAN connectivity, iPass has also been working on support for third-generation CDMA EV-DO through its software client. As long as an iPass user has WiFi and EV-DO connectivity on their laptop they can move seamlessly between the wide area and local wireless connectivity, according to Anurag Lal, VP of business development at iPass.

"We're at the leading edge of fixed/mobile convergence," he claims. Analyst Craig Mathias at the Farpoint Group says that it is just these types of emerging fixed/mobile convergence capabilities that could encourage more carriers to take a closer look at the corporate remote access market. It would allow them to significantly broaden the secure access services they offer over a number of different network types.

This, he claims, could lead to greater consolidation and attempts to build out or acquire more of a WiFi hotspot footprint as part of an overall strategy. "It's all about bulk," he opines. "I'm sure iPass looked at the market and said to themselves, 'We need to be a lot bigger.'" Accelerated competition in this emerging market could prove to be good for users, as larger players could create more price competition for secure remote access services, along with better WiFi coverage and more connection options.

—Dan Jones, Site Editor, Unstrung

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