CORPORATE CASE STUDY: Open access to press boosts Wayport in wi-fi market

Wayport, a wired and wireless internet provider for public places, establishes a niche for itself by maintaining a strong relationship with the media and other wi-fi firms.

Wayport, a wired and wireless internet provider for public places, establishes a niche for itself by maintaining a strong relationship with the media and other wi-fi firms.

"Open access" is a popular term at Wayport, whether it applies to technology platforms or media relations. Providing lots of information to the press is one way the Austin, TX company distinguishes itself in the crowded and sometimes confusing wi-fi wide-area, high-speed, wireless internet access - market. "We're very open in sharing data," says Dan Lowden, Wayport's marketing VP. Wayport calls 60 to 80 key reporters and analysts each quarter just to keep in touch and provide updates, a practice the company began early in its short life. "That puts Wayport in a great position. We are kind of a barometer for the industry." Open is a relative term, however, among companies that provide wireless internet access in public places. Most young wi-fi firms are still privately held. While they aren't required to - and often don't - provide the financial data the law requires public firms to disclose, Wayport and others see the advantages of building strong press and industry relationships, says Charles Golvin, a principal analyst with Forrester Research's San Francisco office. Companies choose to provide varying statistics, which makes comparing them difficult. T-Mobile, for example, says it maintains wi-fi hot spots in about 3,500 retail locations, compared with Wayport's 800 in airports, hotels, and McDonald's. Meanwhile, Wayport says customers connected to its system nearly 300,000 times in January. T-Mobile doesn't disclose user statistics. "There's not a single company in this business that reports subscribers," complains Golvin. Business blueprint Although company comparisons in the wi-fi industry can be ambiguous, Wayport's business model isn't. Since its founding in 1996, the company honed in on business travelers. It provides wired and wireless access to hundreds of hotels, as well as hot spots - sometimes called Laptop Lane facilities - in a dozen airports. Along with competitors Toshiba and Cometa, Wayport also is participating in a wi-fi test in McDonald's restaurants. Wayport serves about 100 McDonald's in the San Francisco Bay Area, Portland, OR, Raleigh, NC, and Boise, ID. McDonald's should decide this quarter which wi-fi provider it will use going forward, and Wayport execs hope to expand the relationship. Despite its seemingly clear-cut business model, analysts might view Wayport differently depending on which window they peer into. As a wi-fi provider, Wayport's biggest competitor is T-Mobile, a cell phone company that also provides wi-fi connections in Starbucks, Barnes & Noble, and Kinko's stores. So far, Wayport and T-Mobile haven't crossed each other's paths often, but with T-Mobile serving some airport lounges and Wayport moving into retail with McDonald's, direct competition between them might increase. Bruce Adams, senior editor of Hotel & Motel Management, thinks of Wayport as a broadband provider for the lodging industry. In that context, Utah-based STNS is its biggest competitor, serving about 80,000 more rooms than Wayport. Hotel internet providers install a combination of wired and wireless equipment, with Wayport deploying wi-fi more heavily, Adams says. Linking itself too closely with wi-fi could be a mistake, says John Yunker, an analyst with Pyramid Research. "I'd say they're very well recognized and associated with wi-fi in particular. They've done a good job of riding the wi-fi wave. I think a danger for them, to the extent that wi-fi is perceived as a bubble, is that they might also be perceived that way." "We look at ourselves as a full-service, high-speed internet service provider," Lowden says. Lowden identifies lodging trade pubs and airport executives as key targets of Wayport's PR activities. He also believes in using the company's media relations efforts to help its clients. "It's great for Wyndham to read about themselves in USA Today because Wayport was interviewed," Lowden says. Wayport also posts links to client hotels on its website, and its sales team helps hotel staff use wi-fi to attract meetings and conferences. Likewise, Wayport takes advantage of the PR opportunities that partnering with much bigger companies can afford. Verizon Wireless, SBC, MCI, Sprint, AT&T Wireless, and others have entered roaming or co-branding agreements with Wayport. Some provide wi-fi access as an add-on to cellular phone service and choose to use Wayport's network instead of building their own wi-fi systems. Wayport also works with computer makers to provide prepaid cards or discounted service subscriptions when people buy new laptops with wireless capabilities. "We look at ourselves as a neutral host," Lowden explains. "We can have direct relationships with customers or any of our communications partners, and we can leverage their public relations and marketing dollars." Wayport's own in-house marketing communications team is small but active. Reporters and analysts describe the firm as responsive and accessible, and Lowden says CEO Dave Vucina and COO Greg Williams are among Wayport's top spokespeople. "PR is a key aspect of a company's strategy," Lowden says. "It absolutely has to be." The company depends heavily on outside PR support. It switched from Edelman to GCI Group last summer. "Edelman did a great job for us. It was just time to kind of break out and get to know other folks out there," says Lowden. "[GCI is] very much a part of our family," he adds. In addition to PR execution, GCI helps with overall messaging and company strategy. Continued growth As much as anything, Wayport strives to position itself as a company of substance. Journalists disillusioned by the dot-com bust tend to be skeptical of technology fads that might fizzle. The business world might have needed a few years to figure out that the internet was a means and not an end, but those who grew wiser after the experience now hold few such illusions about wi-fi. Wayport can legitimately point to a relatively strong track record - it managed to remain intact and grow after the tech bust, while a few key competitors went bankrupt or were purchased by larger corporations. "It's a company that still is relatively in its infancy and has been an incredible steward of investor money, unlike a lot of companies in the dot-com boom," says GCI Read-Poland president Jeff Hunt. "They didn't burn through their capital, which would have left them unable to respond to the changing market." Reporters and analysts have noticed Wayport's attempts to manage expectations. "I think they are trying to downplay some of the hype out there," says CNET reporter Richard Shim. Judging from comments made by another technology reporter, who requested to not be named, Wayport seems to be doing a good job of delivering those messages: "They've had a long slog to get to a point where it looks like they have critical mass to become a profitable, ongoing business. They are very close to that point, and they tell their story relatively well." Wi-fi prognosticators think Wayport might be on the right track with open technological access, a concept the more proprietary T-Mobile hasn't yet embraced. Analysts believe the future of wi-fi probably lies in partnering with cell phone companies on the wholesale level to provide roaming and broadband access, rather than selling services directly to retail subscribers. "I think it's important that we're telling the industry where the successes are and where the challenges are," says Lowden, who believes the true revenue potential of wi-fi will prove itself in the coming months. "I think folks look at Wayport and are kind of rooting for us because there are a lot of challenges to making this work." ----- PR contacts VP of marketing Dan Lowden Marketing communications manager Michele Dewenter HR director Debbie Primera

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