Boingo’s new app crowd-sources discovery of free wi-fi hotspots

Wireless hotspot provider Boingo Wireless announced today that it has launched a new version of its application that crowdsources discovery of powerful free Wi-Fi hotspots at the CTIA Wireless 2011 conference in Orlando, Fla.

Boingo Wireless operates around 211,000 wi-fi hotspots around the world — most of which are in Asia. In fact, only around 15 percent of its active hotspots are in the United States. The company has a number of recurring payment plans that charge anywhere from $8 a month (for mobile devices) to $60 a month (for any device at an international hotspot) to access the Internet.

The company has a piece of software to connect to its wireless hotspots — either on the company’s own network or on its carrier partners. That takes the form of an app on a mobile device or an actual application on a computer. The new application will also highlight free hotspots alongside Boingo Wireless’ premium wireless hotspots — they appear on a map as a blue pin instead of a red pin, which indicates a premium hotspot.

“We, through crowd-sourcing, see which are reliable networks that people are connected to over time,” said Christian Gunning, director of corporate communications at Boingo Wireless. “We’ll help you connect to any free network when it’s available and make it as easy as possible to upgrade to a paid function.”

Whenever a Boingo Wireless user connects to a free network, the network transmits that information back to Boingo Wireless with various specifications about the connection. That includes global positioning system (GPS) data, connection speed and stability. Boingo Wireless then aggregates all the information from its users and indicates which networks are best by building a database of free wireless databases. The new application has a “Boingo free” version that anyone can use — it’s a freemium model that Boingo Wireless hopes will convert paid users. The new application had 300 power users in its beta that has aggregated a lot of data about free wi-fi hotspots already, Gunning said.

“If you can grease the skids and make it easy to connect, and make it easy to upgrade, you can convert some new users,” Gunning said. “There’s a segment of the market that will never pay, there’s a segment that values that connection, and there’s that middle group we’re aiming at that is split one way or the other.”

Upgrading to a paid subscription with Boingo Wireless does not actually fall under Apple’s new subscription model, which takes a 30 percent bite out of a monthly subscription. There are in-app purchases for mobile applications that let iPhone users connect to a premium hotspot for an hour by paying $2 through iTunes — which does fall under the iTunes in-app payment model.

The company is also on track to be profitable for the first year in the past several years — it hasn’t lost money since June 2009. Despite the best attempts of rival companies offering free Wi-Fi during the holiday season, Boingo Wireless made $1.5 million on $19.8 million in revenue in the fourth quarter of 2009. Its income for the most recent operating quarter ending in September was also up 237 percent to $2.1 million, from $626,000 in the same quarter in 2009.

The Los Angeles, Calif.-based company recently filed to go public to raise up to $75 million. It’s had to fend off concerns about whether wireless network providers, which are preparing its 4G generation of wireless technology, are making Wi-Fi hotspot providers irrelevant. But that’s not much of an issue because Wi-Fi hotspot providers will always have a role at large public events and congested areas that would put incredible strain on wireless networks, Gunning said.

“Analysts said that data usage is going to increase 40x, while 4G only increases rates by 3x — I’m pretty good at math and I’m pretty sure that’s not enough,” Gunning said. “Wi-Fi is an off-load strategy in places that are highly static and highly likely to engage in a device.”