Boingo files for IPO set at $75M

The company has not yet determined how many shares to sell or what price range to set for them

Mobile Wi-Fi provider Boingo announced Friday that it has filed a registration statement for a proposed initial public offering.  The number of shares to be sold and the price per share have apparently not yet been decided upon, but the company has set the overall maximum aggregate price at $75 million, according to its SEC form.  Credit Suisse Securities and Deutsche Bank Securities will act as the book-runners while Pacific Crest Securities and William Blair & Co. will act as co-managers.

Boingo’s Wi-Fi network consists of more than 211,000 Wi-Fi hotspots in more than 100 countries at popular public locations such as airports, hotels, coffee shops, malls, restaurants, and stadiums.  Curiously, the company describes itself as what it “believes” to be the largest commercial Wi-Fi network in the world.  More than 1.3 million customers have purchased Boingo’s wireless Internet services in the past 12 months.

In describing its business, Boingo notes that its subscriber base grew 89% in 2009 to 140,000, up from 74,000 in 2008.  That subscriber base grew an additional 43% in 2010 to more than 200,000 subscribers.  But the company’s revenue comes primarily from individual users who purchase month-to-month plans or single-use access to the Boingo network. Partners also pay usage-based network access and software licensing fees to allow their customers access to the Boingo network.  

Additionally, the generates revenue from telecom operators that pay Boingo build-out fees and access fees so that their cellular customers can use Boingo’s distributed antenna system, or DAS.  In 2009, no customer accounted for more than 10% of Boingo’s revenue, according to the company’s prospectus.

So what about revenue?  Boingo’s revenue reached $65.7 million in 2009, representing a 16% increase from $56.7 million in 2008.  In 2010, the company raked in $59 million.

Boingo is confident in its future: Global Internet data traffic on mobile Internet enabled devices is expected to grow to 3.5 exabytes per month by 2014, 39 times the amount of data traffic seen in 2009, the company stated, citing Cisco's Visual Networking Index.  Smartphone users, particularly iPhone users, are expected to account for much of that data traffic.  The average smartphone user generates ten times the amount of data traffic generated by the average non-smartphone user, and the average iPhone owner uses five-to-ten times the amount of data that the average smartphone owner uses.

Boingo is poised to meet the world’s increasing data needs: “Wi-Fi provides higher speed and higher bandwidth per user in high density locations, and is simpler and less expensive to deploy than additional cellular network capacity,” the company says in its prospectus.