Gogo Wireless is a company that provides inflight wifi internet access to a significant portion of the domestic US airline market. They have 81% market share in commercial North American avation. But even though they’re the most popular are they worth the price? Will their company survive and flourish? Here is my Gogo review:
Gogo Review: Pricing
According to Gogo’s recent filing as a public company, they have over 19 pricing tiers that they can change on the fly. For the March quarter of operations though, their average revenue per internet session was $10.30. The average flight in the United States is around 2 hours long, so in essence you’re paying $10 for two hours of internet. Is that worth it? In my opinion Gogo Wireless for $5 an hour is worth it if you’re a business traveler who can expense it. If you’re just a normal leisure traveler going to visit family or Disneyworld it mostly likely isn’t worth it. Especially when you can’t even use the wifi during the first and last 15 minutes of the flight. This is evidenced by the fact they only had a 6.2% “connectivity take rate” in the March 2013 quarter.
Gogo Review: Bandwidth
The biggest issue I have with Gogo Wireless as a service is the bandwidth. I accept that since you’re in a metal tube flying through the air at 400mph that it’s hard to get high quality internet service. But according to Gogo, they target a “300kbs download, 100kbs upload” for passengers.
Beyond their targeted bandwidth, there is what you actually get. Gogo believes they have current bandwidth capable of servicing 24% of passengers at those 300kbs download, 100kbs upload rates. So as long as take-rates are below that, you ought to get faster speeds. On a recent BOS-SFO flight I did a speed test and got 1.5mbs download, and 200kbs upload. This is more than sufficient for checking email and playing Facebook games.
Gogo Review: Streaming Video?
Gogo has stated that they never will have enough bandwidth to enable users to stream video on services such as Netflix on their service. To counter this significant service weakness they offer “Gogovision”, which provides preloaded movies and shows on the wifi network of the aircraft for people to watch rather that stream over the internet.
Gogo Review: Investment Grade?
If you haven’t been paying attention, Gogo Wireless (Symbol: GOGO), recently went public. They IPO’ed at $16/share, but share prices have already dropped to $12 in recent weeks. This was a company that had a lot of venture capital backing and took a long time to grow. The VC investors clearly wanted out and forced the company public so they could provide liquidity to their own investors. It may be worth looking into GOGO has a potential investment, but with competitors such as JetBlue’s LiveTV and Global Eagle’s Row44, it’s definitely a crowded space.