Wi-Fi provider Boingo announced that it has launched a Wi-Fi offloading service with another major Tier 1 wireless carrier in the United States. Boingo inked a Wi-Fi offloading agreement with Sprint last year.

“I’m pleased to share that we have launched Wi-Fi offload with the second tier 1 carrier,” Boingo CEO David Hagan said yesterday on the company’s quarterly conference call with investors, according to a Seeking Alpha transcript of the event. “We are now live in offloading traffic at a major U.S. airport and are working with them to develop a roll out schedule. Like our Sprint deployment, we expect it will take several months to complete a full roll out but we are excited to be underway. In addition to Passpoint authentication, we are also going to explore an additional technical approach to seamless handoff that they requested called Layer Two network integration. This allows a carrier to enable Wi-Fi offload without being beholden to the device manufacturer. We're still big supporters of Passpoint because it scales better at an industry level, but see this as potentially attractive alternative to some carriers.”

Hagan didn’t name the carrier, and a Boingo representative didn’t immediately respond to questions from FierceWireless on the topic. However, Hagan’s comments on Passpoint are noteworthy considering T-Mobile US tested Wi-Fi offloading using Passpoint technology with cable operator Bright House Networks last year.

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When questioned on the expected size of the agreement with the unnamed carrier, Hagan said only that it would be a “significant business for us.”

“It will be 2017 before it is really impactful as we go through the rollout process and so it is already factored into our 2016 guidance because we have been knowing this was coming as we have discussed,” he said. “Yes, we expect this to be significant business for us over the long term.”

The addition of another carrier to Boingo’s Wi-Fi offloading effort isn’t a total surprise; company executives have said previously they were in discussions with a second customer after Sprint.

Sprint in 2015 struck a multi-year Wi-Fi offloading agreement with Boingo Wireless to seamlessly offload its customers' data traffic to Boingo's Wi-Fi networks at 35 major U.S. airports. The Boingo deal is one element of Sprint's strategy to make Wi-Fi an integral part of its network as part of an effort to improve the performance of its network.

And earlier this year, Boingo said that roughly 22 million Sprint customers were moving onto Boingo's Wi-Fi network in dozens of U.S. airports across the country. The company added at the time that it was supporting all of Sprint's iOS and Android phone customers, and that it planned to expand support to Sprint's sub-brands, which likely include the company's prepaid brands like Boost Mobile and Virgin Mobile. Boingo said it eventually expects to support up to 40 million total Sprint customers.

Despite Boingo’s apparent success in inking Wi-Fi offloading agreements with major U.S. wireless carriers, the effort doesn’t yet appear to be turning into major financial gains for the company. The company said its revenues from its “wholesale Wi-Fi” business dropped 4.9 percent to around $5.2 million. “This decline was due to decreased partner usage based fees primarily from a contract that was terminated in the second half of 2015, the legacy wholesale roaming customer added minimum usage commitment of 700,000 per quarter. Excluding the impact of this customer in the prior year period, wholesales Wi-Fi revenue would have increased 10.2% year-over-year. Further we expect usage from our carrier offload customer and further expansion of our Comes with Boingo product to more than offset this customer loss in the future quarters,” explained Boingo CFO Pete Hovenier on the company’s earnings conference call.

Financial analysts offered a relatively muted reaction to the addition of another wireless carrier to Boingo’s Wi-Fi offloading business. “Presumably the new operator should have a larger impact on results than Sprint, but it’s still unclear when and how much this revenue will ramp,” wrote BTIG analyst Walter Piecyk. “In addition, the Sprint business does not appear to be enough for Boingo to grow wholesale revenue in the fourth quarter given the difficult comps of credit card activations at the end of last year. We cut our 2017 wholesale revenue by $6.7 million to $25.5 million.”

“We believe a double digit millions run-rate is reasonable at full scale,” noted analysts at Jefferies in a research note on Boingo’s earnings announcement. “Management believes that its experience with the Sprint contract puts the company in better position from a network perspective, while potentially speeding deployment as well.”

Overall, Boingo’s revenue grew 14 percent year-over-year to $39.1 million. The company’s net loss widened to $7.3 million, from $5.9 million in the year-ago quarter.

For more:

- see this Boingo earnings release

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