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[qi:gigaom_icon_routers] Verizon (s VZ) said today that it’s inked a partnership with Wi-Fi hotspot service provider Boingo Wireless that will allow its broadband customers to use Boingo hotspots across the country, an agreement that was first reported by The Wall Street Journal back in May. The New York-based phone giant has been somewhat of a flip-flopper when it comes to playing nice with Wi-Fi, always insisting that its 3G wireless networks are better. Regardless, Boingo is the one that’s laughing all the way to the bank. The two companies have had a relationship for many years, but only because MCI had partnered with Boingo before being acquired by Verizon. Since then, Boingo has partnered with Verizon Business, which I guess includes parts of MCI.
The new contract is designed as a master agreement, giving Verizon the right to extend services previously provided to Verizon Business to other business units. “Verizon is one of our longest-standing platform services partners, and the renewal and expansion of this agreement is further validation of our turnkey offering,” said Dave Hagan, president and CEO of Boingo Wireless. “This renewal extends our six-year relationship into a decade-long partnership.” (Boingo Press Release.)
Boingo, I bet at the urging of Verizon, is being vague about the deal. But since this is a much-expanded relationship — probably the biggest private-label deal ever signed by Boingo, and one that is going to significantly impact the company’s revenues — I would say Verizon has significant plans for the Boingo network. Santa Monica, Calif.-based Boingo has been selling its network as a white-label solution to companies such as EarthLink (s elnk), BT Infonet and others. And as a direct result of this business, the company has become profitable.
After mocking Cablevision (s CVC), its hometown broadband rival, and AT&T (s T), its national rival, it looks like Verizon is eating crow when it comes to Wi-Fi. When Cablevision launched its Wi-Fi service, a Verizon spokesperson dismissed it as “nothing more than a marketing stunt.” A stunt so awesome that Verizon is copying it!
From Verizon Press Release:
New Verizon FiOS Internet customers who order an up-to- 25/15 Mbps* (megabits per second) or faster connection, or new HSI customers who order an up-to- 3 Mbps/768 Kbps* (kilobits per second) or up-to- 7.1 Mbps/768 Kbps* connection, can connect to the new Verizon Wi-Fi hot spots, at no additional charge as part of their broadband service.
The new WiFi service is also available free of charge for existing FiOS Internet customers with up-to-20 Mbps or faster packages and existing HSI customers who have either an up-to-3 Mbps or up-to- 7.1 Mbps package.
So the big question is, why is Verizon doing this deal? For starters, Cablevision in particular has been very successful in building loyalty with its broadband subscribers thanks to its free Wi-Fi offering.
Verizon will be able to do the same, expanding its relationship by offering free Wi-Fi to its wireless customers. And if the rumors of an Apple (s aapl) Tablet that uses the 3G and 4G networks are indeed true, Verizon is smart to get a Wi-Fi network in place — so as to not repeat the mistakes of AT&T, which spent $275 million to buy another large Wi-Fi provider, Wayport, to bulk up its wireless capabilities.
Maybe Verizon should buy Boingo?