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Why Wi-Fi Networks Are Foundering
By Larry Hendrick | August 15, 2007
So you didn’t believe me—would you believe Olga? Olga Kharif of Business Week has an online article today that brings to light many of the shortcomings of the Muni WiFi movement. The costs are higher, the network deployment is slower, the defaults are higher, the speeds are slower …
Just look at the quote below, and pay special attention to the parts I placed in bold.
Why Wi-Fi Networks Are Floundering
While it’s unclear whether he was referring to San Francisco in particular, EarthLink’s new chief executive officer, Rolla Huff, promised in his company’s July 26 earnings call to “delay any further build-outs and scale back operating expenses” on existing muni Wi-Fi projects. Though EarthLink doesn’t disclose specific operating results for that business, there’s little hope it will turn profitable soon. “The Wi-Fi business as currently constructed will not provide a return,” Huff said during the conference call. EarthLink did not respond to requests for additional comment, while Google directed all questions about the San Francisco project to EarthLink.
AT&T, which made a splash as the only major telecom player to embrace the muni Wi-Fi market, is also showing some doubt. The company is “evaluating” whether to pursue any new deployments or even whether to continue working on its four existing projects, says Ebrahim “Eb” Keshavarz, vice-president for business development at AT&T.
In an article I wrote in March, 2006, I outlined the costs associated with deploying this type network, and showed that the business model as proposed, wouldn’t work—why it couldn’t work.
Then in May, 2006, I addressed the six selling points the City of Houston used to sell this type wireless network to its citizens and city council. Again showing the fallacy of the proposals.
As stated in Olga’s article, the only way to cover the implementation costs for a WiFi network, is requiring the city to hold the anchor tenant spot, but that has its problems, as well. The service isn’t reliable or robust enough for cities to cancel their copper or fiber connectivity, but that is the only way to cover the costs. Then the sellers tout the robustness and reliability of their service, but with no interior coverage and the bandwidth limitations, it’s just unacceptable.
See what I mean? Catch-22
Topics: WiFi |