Earthlink struggling with wireless initiatives

Two of Earthlink's high-speed wireless initiatives are coming to a head for the ISP. During the company's second-quarter conference call last week, Earthlink President and CEO Roll Huff acknowledged that his company's approach to the muni-WiFi market is not working. To make sure the company gets a return on its investment, he wants "municipal government to step up and become a meaningful anchor tenant on completion of a build."

The announcement is similar to how MetroFi has changed its strategy by pursuing a path that requires anchor-tenant commitments from municipalities to ensure that MetroFi can make money in the market. Earlier this year, EarthLink revealed it was pulling back on its muni-WiFi business [1] to focus on its existing contracts and larger cities for the rest of the year.

Meanwhile, Earthlink's MVNO joint venture with Korean operator SK Telecom continues to bleed money. Thanks to Helio, EarthLink posted a loss of $16.3 million in its second-quarter filing, down from a profit of $16.6 million this time last year. Revenue for the quarter fell 6 percent to $312.2 million, down from $332.1 million a year ago.

Reports circulated a few weeks ago when Huff first took the helm as CEO that he might cut Helio [2], but EarthLink SK Telecom are making good on their promise to each invest an additional $100 million in the MVNO. Both partners have already approved respective initial funding of $30 million.

For more about Earthlink's wireless woes:
- read this blog [3] from MuniWireless
- check out this press release [4]