Boingo Wireless responds to pressure for free NYC airport Wi-Fi

Wi-Fi and distributed antenna system provider Boingo Wireless is facing pressure from the New York City Council to offer free Wi-Fi service at the three major New York-area airports, for which the company holds the exclusive right to provide wireless Internet access.
The New York City Council passed a resolution late last year ordering the Port Authority of New York and New Jersey to renegotiate Boingo’s standing contract to include free Wi-Fi access at La Guardia, John F. Kennedy International Airport and Newark Liberty International Airport in New Jersey.
In 1999, Boingo was awarded a 15-year contract for the exclusive rights to provide wireless Internet access at those airports, and a six-month window for renewing the contract for an additional 10 years began in August 2013, according to city council documents.
Boingo currently charges about $5 for one hour of Wi-Fi service at the airports, and about $8 for 24 hours of access. The city council has argued that Boingo provides free Wi-Fi access in other airports and that subscription Wi-Fi at airports with significant international traffic is an undesirable barrier for travelers seeking wireless access.
Boingo responded last week to a recent letter from the NYC Council, saying that it “has been in discussion with the Port Authority for some time to determine the best way forward in delivering an optimal passenger experience while addressing the very real costs required to do so.”
In the meantime, Boingo said that it has been delivering sponsored Wi-Fi sessions intermittently at the airports for more than four years. In the first quarter of this year, Boingo added, more than 55% of all Wi-Fi sessions at the airports were complimentary due to sponsorships from major brands that included Amazon Mobile, National Rental Car and Marriott. Boingo also said that in the third and four quarters of 2013, almost 60% of all airport Wi-Fi sessions were free due to sponsorships and that it is continuing to work with sponsors to deliver complimentary Wi-Fi sessions.
Meanwhile, Boingo reported its most recent quarterly results last week, with revenues up more than 14% year-over-year and strong contributions from its advertising segment.
The company reported an overall net loss of $5.4 million, widening from the $1.1 million in losses during the prior year period due to investments in its military broadband deployment, but the company expects subscription revenues in that area to ramp up as it launches more networks in the second half of the year.
David Hagan, CEO of Boingo Wireless, said in a statement that the year “is off to a strong start, with Boingo delivering excellent financial performance while also securing major contract wins that will help build the foundation for continued long-term growth. Revenue growth of 14% exceeded expectations and demonstrated the kind of double-digit growth we believe is sustainable now that we’re clear of the industry changes that served as a headwind to growth in 2013.”
Hagan added that Boingo’s advertising business saw triple-digit revenue growth for the quarter, and that its DAS segment also had a record quarter, “with venue agreement signings occurring in the first three months of the year worth more than all agreements signed in 2013.”
Boingo expects the second quarter of 2014 to result in revenues between $26 million and $28 million.