Mobile Roaming with UMA

With so many announcements at 3GSM, it’s hard to keep track of them all.

One little noticed announcement came from Boingo. The company launched a worldwide Wi-Fi service for mobile phones. For a flat rate of $7.95, subscribers can connect their Wi-Fi enabled handsets to any one of Boingo’s 35,000+ hotspots around the world.

Presumably this is targeted at people who carry the Linksys iPhone to provide Skype access at hotspots.

However, I think there’s another perspective here that is very interesting for mobile operators.

There is a lot of talk about international mobile roaming rates, and pressure abounds to lower the fees charged. UMA and Boingo can address this concern immediately.

First, some background. From a dual mode handset perspective, one challenge to using a mobile phone in hotspot-type Wi-Fi location is that most access points are designed for laptop users to log in, connect and pay for access. Yet mobile phones don’t have the capability to enter a credit card number or even render the landing page of the Wi-Fi network.

To overcome this problem, Boingo has developed an open-source version of their access manager. The Boingo client, running on a dual mode handset, can be configured to identify a foreign SSID, check if the AP is part of the Boingo network, then automatically supply the authentication credentials. Thus any of the 35k APs in the Boingo network can become a seamless extension of an operator’s Wi-Fi network.

For me, making a call with my US SIM when I was in Barcelona cost about $1/minute. With a UMA-enabled phone, technically I should be able to connect to any Wi-Fi AP and calls would be local and therefore billed at my normal per minute. But mobile operators like the roaming revenues, so most UMA service plans disable the use of Wi-Fi access outside the home country.

However, suppose my T-Mobile UMA service offered a special International package. So, for example, calls made from outside the US, over the Boingo hotspot network, are billed at a discount of $0.50/minute.

For the consumer, this is a 50% reduction in the cost, certainly enough to generate interest. For operators, that $0.50/minute is nearly all profit as the call connects over IP and the international operator’s GSM network is bypassed.

Seamless handover isn’t supported (the UNC isn’t connected to the local BSC), so there’s no problem with partial billing or handover billing.

It’s a win-win situation, operators continue to collect fat margins on international calls, and consumers actually get a cost savings on a per minute rate.

I think these guys at Boingo are on to something.