The deal announced this week between iPass and Devicescape was a blow for common sense and genuinely creates a potential partner for any business that needs fast reliable access to WiFi. That makes it a first point of call for WiFi First MVNO style deals, as well as enterprise customers.
Both companies try to make a large number of WiFi hotspots available to a common customer base, in Devicescape’s case it was mostly Free WiFi hotspots which are either free or open, and for iPass it was more a case of collecting together sites which require some payment, but which would negotiate for a bulk deal with iPass.
This is great for mobile offload and a recent deal illustrates this, when back in January WiFi First mobile service FreedomPop, partnered Devicescape for launches in Europe, something going live this week (see separate story). In the US it had already partnered with FreedomPop and Republic Wireless. Now we know that all this does is allow phone users to log on once, and then almost never have to log on to WiFi again, but it means that nomadic phone usage is possible using VoWiFi, and that’s vital for WiFi First services. If each of them had to go around building relationships with every WiFi hotspot, it would take forever for WiFi First services to take off.
The two companies between them are claiming access to 50 million Hotspots, although we’re not clear if there is any overlap in that figure. For instance we are unsure if both iPass and Devicescape each had access to Comcast’s Homespot network (it has now risen to 10 million), and if any overlap has been eliminated from the total. In fact we’re fairly sure that Devicescape never previously had access to this, and we know iPass did, so the 50 million could be a bone fide total.
Under the terms of the deal iPass will integrate the Devicescape Curated Virtual Network (CVN) into its global WiFi network, and what that means is that its enterprise customers (who pay perhaps $25 a month for unlimited WiFi access) will also have access to Devicescape’s amenity WiFi network of Free Hotspots, which sits across 20 million hotspots worldwide. This is important for iPass customers, as there has been commercial pushback against iPass from customers saying “surely” WiFi is Free? Of course if your enterprise road warrior has to wander the streets looking for FREE WiFi, it can soon eat work hours and make his life miserable. But equally having to get a new log in at every restaurant, hotel or airport is similarly demoralizing and gets in the way of work and this new deal gets around that.
Whatever Devicescape will tell you, it is impossible to build a 20 million Hotspot network without Homespots, since at Rethink we counted commercially planned WiFi hotspots last year, and found that they are at around 7.5 million globally, with 4.3 million of those in China. Even counting cities like San Francisco and Barcelona, known to have contiguous outdoor WiFi across their landscape, doesn’t bring up that number appreciably. And that number includes the few installations of cellular operators with carrier class WiFi.
It is important to understand the difference here – a hotspot is often radio planned, it has plenty of backhaul and it has a commercial log on process, controlled by Radius servers with secure authentication. Homespots are getting to that point, but are often sat on top of one another, have limits in how much of the capacity each user can have, and are almost all indoors, and just “leak” to passers-by. We have a rule of thumb that you need about 30 Homespots to have the same effect as one carrier class outdoor Hotspot.
By comparison now, FON claims 17 million FONspots, which are homespots, for the most part (though not exclusively) on telco networks, using ADSL backhaul. The iPass network is certainly larger than that, and also many of these FONspots are not as good. They are telco owned, and access is not controlled by FON, so for instance a BT customer may have limits placed on UK FON access by BT, for instance only 1 GB a month, and KPN can decide if it charges BT customers for WiFi access on its network when they are visiting the Netherlands. It is a Federation of large chunks of Homespots, which can choose to work together, but which don’t have to, although FON as an organization tries to make them co-operate.
iPass went through a stage of considering its options last year and decided to retain its independence, but appointed a new CEO in Gary Griffiths. He said as he was appointed that he would announce a doubling of the iPass network by the end of 2015. So far, with this deal, it has gone from 30 million to 50 million, which leaves 10 million to find, which he says he will address next week at his earnings conference, when he will announce more deals.
One deal that he might have up his sleeve might be Liberty Global, which had promised to take its Homespot network to 10 million in Europe by the end of 2015, so if iPass signs up a deal with Liberty, it could add that 10 million in one go. There are of course other ways to do this. A deal with one of the Telcos in FON is possible, for instance BT has 5.4 million FONspots, and of course there is always China Mobile, which has 4.3 million hotspots of its own. The four French telco operations have more than 20 million Homespots operational, and iPass could also sign with more of these. France is the biggest example of the power of using Homespots in a WiFi First network, because with just 5 million, Iliad’s Free virtually changed the pricing of cellular in a single stroke, and has attracted 10 million cellular customers in 4 years.
iPass also raised the idea that the deal with Devicescape could be significant for IoT services. Devicescape typically has access at hotels, airports, cafes, retail outlets and its software uses crowd-sourcing to discover the best available WiFi locations using a kind of real time, cloud based network quality control.
The announcement did not say anything about the commercial terms of the deal, but we imagine that both companies are finding life tough in a world where younger generations are totally WiFi aware, and work with a patchwork of free WiFi services in their home area.
For the period of this agreement, iPass says it will have some exclusivity to Devicescape’s assets and the partnership is effective immediately, with integration expected to be complete by the end of the current quarter.
Faultline would not be at all surprised if these two companies merged at some point in the future. Right now they each have slightly varying philosophies, but both thrusts into Free WiFi and Enterprise WiFi, could be retained in a merged entity we feel.