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Boingo Wireless losses widen as it builds out Wi-Fi network

Boingo Wireless' Wi-Fi locations reach 'more than 1 billion consumers annually'

If you've ever used a Wi-Fi network at Los Angeles International Airport, several other airports or military bases in California, chances are that you've been on Boingo.

Boingo Wireless Inc. was created in 2001 by Sky Dayton, founder of EarthLink Inc. He had the idea of bringing high-speed Internet access to travelers and others as they moved from airports to hotel lobbies and other public places.

Since then, Boingo has tried to capitalize on the public's seemingly endless appetite for constant, seamless connectivity.

"People know us as the company that put Wi-Fi in airports, but that now represents just 30% of our business," said David Hagan, who replaced Dayton in 2004 as the company's chief executive. Dayton remained on the board until last year.

"Now, we think of ourselves as the company that helps people stay connected in many different kinds of places," he said. "That can be in airports, on a military base, stadiums, arenas and many other venues."

The Los Angeles company also provides high-speed Wi-Fi access to schools and universities, offices and hospitals.

Boingo service can be used on smartphones, tablet computers, laptops and other Wi-Fi-enabled wireless devices. The company offers a variety of plans that range from $9.95 a month for unlimited Wi-Fi roaming on two devices to $39 a month for up to 2,000 minutes of global roaming access on up to four Wi-Fi devices.

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On May 2, the company announced a multiyear deal with Sprint Corp. that would give the carrier's cellphone customers free Wi-Fi access at 35 major U.S. airports.

Hagan said the system would automatically switch customers from their cellular networks to a secure Wi-Fi system.

Among airports in the plan are LAX, Bob Hope Airport in Burbank, John Wayne Airport in Santa Ana and Lindbergh Field in San Diego.

Accomplishments

Hagan said that the company is a survivor and a pioneer "producing Wi-Fi before it was even called Wi-Fi."

It's ticker symbol on the Nasdaq exchange is WIFI. It picked that up in 2011 when it went public, raising $77.9 million.

"We have figured out how to navigate in rapidly changing markets, and we are figuring out ways to succeed," he said.

By 2003, Boingo Wireless was offering Wi-Fi access in 300 cities at a cost of $24.95 a month. Two years later, the company had 18,000 Wi-Fi hot spots in 37 countries around the world.

Currently, it has high-speed networks that cover more than 1 million distributed antenna systems and Wi-Fi locations that reach "more than 1 billion consumers annually," the company said.

Its wireless services also cover 137,000 beds at 31 Army, Air Force and Marine bases in North America, Hagan said.

Challenges

Boingo's losses have been widening through most of the last two years. It has lost money in eight of the last nine quarters, while its revenue has fluctuated. A drop in advertising revenue hurt its first-quarter results.

Hagan attributed part of the company's losses to increased capital spending to expand and build out its network, especially on military bases.

"We have about 100 network build projects going on right now," he said, "and that is a huge execution challenge, managing those and making sure they get built on time and on budget. That's what keeps me up at night.

"The good news is we have about as much business as we can possibly handle."

Last week, the company reported a first-quarter net loss of $7.8 million, or 22 cents a share, compared with a loss of $5.4 million, or 15 cents, in the first three months last year. Quarterly revenue rose to $29.4 million from $26.5 million.

Analysts

Wall Street sees the company as a good bet for investors. Of the five analysts who regularly follow Boingo Wireless, four rate it a strong buy and one rates it as a buy.

On Friday, Credit Suisse analysts said in a note to investors that they maintained an outperform rating on Boingo and set its target price at $9 a share.

The stock closed Friday at $8.59. It has risen 12% this year.

ron.white@latimes.com

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