In a recent and thorough review of the company’s wireless business, Earthlink has indicated that it is likely to drastically scale back its wireless efforts. This has come on the wings of massive business losses due to higher-than-expected deployment costs and lower-than-expected usage by residents of the cities where wireless networks have been established.
According to Earthlink President and CEO, Rolla Huff:
“After a review and analysis of our municipal wireless business, we have decided that making significant further investments in this area could be inconsistent with our objective of maximizing shareholder value.”
Earthlink’s decision to pull back from municipal Wi-Fi come as no shock to those who have been closely looking at the statistics (also known as the writing on the wall). Since the beginning of the year, municipal Wi-Fi has been floundering, and even the few deployments that are doing well are proving to be headaches (big ones) for Earthlink. In the case of a 135-square-mile network constructed for Philadelphia, Earthlink soon realized that the cost was much more than anticipated. Instead of using the expected 20 to 25 nodes per square mile, it was necessary to utilize as many as 47 to provide adequate coverage.
Is municipal Wi-Fi on its way out? Some say yes while others say no. It is clear, however, that at least for now, most cities are reluctant to commit to being anchor tenants for Wi-Fi networks.