Will EarthLink continue to chase the WiFi consumer?
Will EarthLink continue to chase the WiFi consumer?
What is EarthLink doing in the muni-WiFi space? That is a question a number of municipalities, including San Francisco, Houston and now Alexandria and Arlington, Va., would like answered. They are all awaiting word from the Internet provider's re-evaluation of its municipal WiFi contracts. Evidently, EarthLink's new CEO Rolla Huff is expected to announce the results of his re-evaluation by the end of September.
It appears that a number of municipalities that were left in limbo still believe EarthLink will honor their contracts. In Alexandria and Arlington, EarthLink has already paid for the up-front costs, and it installed antennas, paid rent to municipalities for attaching them to utility poles and provided free service to government agencies. The payback was to come through subscriber fees. In Houston, where EarthLink won a contract months ago, government officials are in negotiations with the ISP.
Muni-WiFi analyst Craig Settles, who has been saying for some time now that public access is a weak reason for muni-WiFi primarily because of the plethora of free WiFi hotspots and the fact that the technology doesn't work well indoors, told me that it doesn't appear EarthLink will be moving away from a strategy that has primarily centered on the consumer.
Case in point, EarthLink recently touted its network in Anaheim, which went live June 29. The service on the network is going to cost $21.95 a month or significantly less for daily and hourly passes. Moreover, EarthLink announced in July that it plans to sell muni-WiFi service through retail outlets. The company hasn't disclosed which retailers will carry the service. EarthLink's service is currently operating in five cities--Anaheim, Calif.; Corpus Christi, Texas; Milpitas, Calif.; New Orleans; and Philadelphia.
According to Settles, mobile workforce applications will be muni-WiFi's biggest ROI generator, which is something MetroFi recently woke up to by now requiring cities to sign anchor-tenant agreements with the firm. Yes, some municipalities have balked at that idea and walked away, but MetroFi has to make a buck.
If EarthLink wants to stay in the business, it really should focus heavily on government uses for WiFi, where an investment from government can be justified. Services such as video surveillance and meter reading have proven to save governments money. But that strategy seems to run counter to EarthLink's goal of pushing its services beyond dial-up to the consumer. We could very well see EarthLink cutting its losses in the cities that are on hold and pumping money into encouraging consumers to use the service more in the places where WiFi is already up and running.--Lynnette
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Posted by Anonymous | August 27, 2007 - 12:46pm
Unfortunately the earthlink business and technical model is (was) flawed.
They did not go after the higher ARPU of the business and government accounts. Including point to multi point and multi tenant housing from the towers they installed. The play for residential service that requires CPE is a challenge at the node density they put in place. With a loss of 20% of signal for each wall passed and 50% for every 3m of tree you pass through it difficult to meet the SLA consistently across the varied terrain. This is a long educative sale process at best.
The architectural approach they took is also expensive and takes to much time to get to market. They needed a multi radio mesh network that could be quickly deployed with out expensive towers or RF engineering. The approach of building a capacity injection layer to feed a single radio mesh a failed system.
