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Pronto Hops on Hotspot Ops

ATLANTA -- Supercomm -- Pronto Networks Inc., the OSS company that's targeting its software package and outsourced services at wireless LAN hotspot service providers, is looking for further funding as it signs up customers and primes itself for a major breakthrough in Europe.

Talking at the Supercomm show in Atlanta, Doug Hilmes, Pronto's VP of business development, told Boardwatch the company was signing up two to three service provider customers a week and now has more than 60. While many of these are ISPs and specialist service providers, the company is on the verge of at least one partnership in Europe that will put its system in front of some of the Tier 1 telecom operators that are dabbling with hotspot services.

To help fund that expansion, the company is about to embark on a roadshow for its second round of funding to follow on its initial $5 million joint investment from the Intel Communications Fund and Draper Fisher Jurvetson.

Pronto’s pitch centers around enabling service providers to plunge into the hotspot access market, which is expected to grow rapidly in the coming years (see IDC: Euro Hotspots to Boom and Hotspots: Getting Hotter? ). In particular, Pronto’s software helps service providers bundle hotspot access with existing services, which requires integration of various OSS functions.

It sounds like a great idea, but the acid test will be whether Pronto’s products are picked up by some of the bigger names with grand hotspot plans, such as Cometa Networks Inc. in the U.S. and Swisscom Eurospot in Europe (see IPass and Cometa Cozy Up and Swisscom Buys a Bevy of PWLAN).

So is there such a thing as a specialized OSS for hotspots? Well, Pronto seems to have pulled together a suite of software modules that, while not unique on an individual basis, would be a nightmare for a service provider to pull together itself. It includes some vital modules to handle various types of user authentication, billing, and roaming, as well as the usual components of fault management, activation, and inventory, to name a few. However, a service provider doesn't have to take the whole Pronto package: It can integrate the specialized modules with an existing OSS system if the system already has installed capabilities.

Hilmes says automated provisioning and management of access points -- down to the relatively simple, but often not deployed, ability to remotely manage access point devices, rather than have to send an engineer -- is a key element for service providers planning to install and manage hundreds of thousands of hotspots. The remote management also means that the access points can be self-installed by partners, such as coffee shops or business meeting venues, as all they have to do is follow an easy set of instructions for physical deployment and then let the service provider manage the rest of the process.

Pronto can also provision and manage hotspots on an outsourced and revenue-sharing basis from its 24-by-7 operations center. In April, Pronto was managing more than 3,500 hotspots all over the world for its customers, an increase of nearly 1,000 on March.

Further growth looks a given. The company is about to announce partnership deals with two major names, one a billing vendor and one a professional technical services company, that will give the OSS firm even wider channels to market. It already has sales deals with Boingo Wireless Inc. and Navini Networks Inc., as well as an OEM arrangement with Alvarion Ltd. (Nasdaq: ALVR) (see Navini, Pronto Team for WWAN and Pronto Gets Into Alvarion).

What the company needs now is some big customers to give it some deep revenue streams. None of its announced customers are household service provider names, and it doesn't have a wireless carrier customer yet -- a sector where much of the major hotspot growth is expected to originate.

But it does seem to have an attractive story for the large operators that are jumping on the hotspot bandwagon. Hilmes calculates, based on Pronto's own R&D experience and those of others in this market, such as Boingo, that it would cost up to $10 million for the likes of Verizon Communications Inc. (NYSE: VZ) to build a back-office system to run its New York network of hotspots (see Verizon: WLAN, Phone Home), whereas Pronto's price would be about $650,000 for a ready-made system. "Our system can give service providers a lower cost of entry to do this properly and help them reach a revenue-generating stage earlier than if they went it alone," he claims.

— Ray Le Maistre, Editor, Boardwatch

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