The segregated world of wireless local area networks took a giant step toward integration as the nation’s largest Wi-Fi hot spot provider T-Mobile USA Inc. reported a deal with software-enabled virtual network operator iPass Inc. allowing iPass’ corporate customers to roam onto T-Mobile USA’s more than 3,600 HotSpot locations.
While the Wi-Fi market has yet to attract a large enough following to justify a business model, analysts noted the deal could prove the catalyst for further Wi-Fi network roaming, which many feel is needed if the Wi-Fi market is to provide real-world results to go along with its history of marketing hype.
“This is probably the most significant roaming announcement yet announced in the U.S.,” said Pyramid Research analyst John Yunker.
T-Mobile USA, which noted this was the first inbound roaming agreement it has signed, said it expects the deal to open its Wi-Fi network to additional corporate customers that the carrier’s internal research has shown currently constitute approximately 88 percent of the network’s usage.
“This agreement with iPass continues to underscore our strategy of focusing on the enterprise market and meeting the needs of enterprise customers,” said Joe Sims, vice president and general manager of T-Mobile HotSpot.
Analysts noted the access to additional corporate customers is important to T-Mobile USA since a majority of its current HotSpot locations are in consumer-oriented venues including Starbucks and Borders Books. The company has made recent strides in providing access through more business-oriented locations, signing agreements with Kinko’s and a number of airlines as well as through partnerships with computer manufacturers.
Redwood Shores, Calif.-based iPass is also expected to see significant benefit from the agreement as the company attempts to differentiate itself from an increasing number of hot-spot aggregators. The company’s current network offering includes nearly 3,000 Wi-Fi hot spots in 16 countries and more than 1,200 wired broadband venues around the world.
“Both companies believe the addition of the T-Mobile HotSpot network to the iPass global Wi-Fi network of business-oriented venues represents a major step closer to the tipping point in the adoption of Wi-Fi by the enterprise,” said Ken Denman, chairman and chief executive officer of iPass.
In addition to allowing iPass corporate customers to roam onto T-Mobile USA’s network, the deal enables the connections to be made through the iPassConnect service interface. Both companies also said they will support the latest security upgrades for Wi-Fi networks known as 802.1x, which T-Mobile USA announced earlier this year it planned to deploy across its Wi-Fi network.
Analysts have noted repeatedly that Wi-Fi roaming is essential for the continued adoption of services and that T-Mobile USA’s industry-leading position in the space necessitated the company to allow roaming onto its network for further growth. Most of T-Mobile USA’s wireless carrier competition, including Verizon Wireless, AT&T Wireless Services Inc., Cingular Wireless L.L.C. and Sprint PCS, have based their more limited forays into the Wi-Fi space on roaming agreements with Wi-Fi aggregators like Wayport Inc.
While few expect T-Mobile USA to allow its competitors to access its network anytime in the near future, the possibility for additional roaming agreements with other Wi-Fi aggregators has increased.
“This partnership is not exclusive, which means that we do expect to see T-Mobile open the door to other players,” Yunker added.
A T-Mobile USA spokesman noted that while the agreement with iPass was specifically for inbound roaming onto T-Mobile USA’s network, the carrier would be open to additional agreements in the future that included both inbound and outbound roaming once a number of issues could be resolved, including quality of service.
T-Mobile USA announced a deal earlier this year with Boingo Wireless Inc., which operates its own Wi-Fi network aggregator service, to develop connection software for T-Mobile USA’s Wi-Fi and GPRS networks. The integration of wide area and local area networks is expected to increase with the development of PC cards that include GPRS or CDMA2000 1x technologies with Wi-Fi access.
“The next year should prove to be the ultimate test for T-Mobile’s Wi-Fi play,” said Jeffrey Rickard, wireless industry analyst at Current Analysis. “If the carrier can add in its GPRS network as part of its package, the company’s business data solution is a considerable threat.”
Rickard added that once T-Mobile USA strengthens its data offering it could leverage the service to expand its presence in corporate wireless voice services.
Embattled telecommunications provider WorldCom Inc. also made an aggressive move into the Wi-Fi space this month, reporting a roaming deal with Boingo providing WorldCom’s MCI customers using personal digital assistants with access to more than 2,000 Wi-Fi hot spot access points worldwide to go along with its existing 600 locations in the United States.
MCI said it will integrate the additional Wi-Fi locations into its Access Manager client, which currently includes wireless, dial-up, DSL, Ethernet and PDA access points, and it plans to add an additional 3,000 wired and wireless hot-spot locations by the end of next year.
