It’s official. EarthLink will sell its muni Wi-Fi offerings. The news, which comes as no surprise, is the latest update on the ailing company’s efforts to turn its profit picture around. The Financial Times predicts the announcement is “likely to cast a further shadow over plans by other cities to roll-out free or low-cost municipal WiFi networks.” I beg to differ.
While EarthLink’s retreat from the market has had an impact in big cities that either partnered with (or hoped to partner with) EarthLink, interest in muni broadband, including muni Wi-Fi, is as high as it’s ever been in smaller markets. Often, rather than tackling ambitious city-wided deployments, they’re pursuing their goals with incremental build-outs. And there’s even greater interest in, and a great deal of funding available for, public safety networks. EarthLink’s retreat from the market opened opportunities for smaller companies with innovative alternatives, such as what Meraki is offering in San Francisco.
The market’s future appears much brighter than EarthLink’s own. Gary Kim of TMCnet compares the company’s “downward customer spiral,” prompted by subscribers moving to broadband, as what happened to AT&T and MCI in the 1990s. He writes: “it probably is worth noting that even giant AT&T and MCI ultimately failed in their diversification efforts, MCI becoming a part of Verizon while AT&T was bought by SBC.”
The company announced at its earnings call this week that losses in the fourth quarter were down from the previous year’s–$9.5 million, compared to $24.8 million. But revenues were down 14 percent and EarthLink saw a 27 percent drop in subscribers.
Click here to read Gary Kim’s TMCnet report.
Click here for CNN Money’s report on EarthLink’s earnings call.
Click here to read The Financial Times story.
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