Friday, May 04, 2007

ELN Will Try Focus

EarthLink has decided to concentrate on its current projects before tackling more. The Muni Wi-Fi effort so far has not provided any home runs. So ELN will take the rest of the year to work on increasing take rates for its existing projects - and work through the political rankles to get the networks built that they have contracts for. CIO Magazine has a nice write up on it.

Reports of spotty service on some of the networks, along with political spats and doubts about advertising prospects, have taken some of the shine off the municipal Wi-Fi movement. EarthLink's scaling back is likely to raise further questions about the economic viability of the concept, though these projects are still in their infancy. The Atlanta service provider has won contracts for networks in Houston and Corpus Christi, Texas, and other cities and has been chosen along with Googlefor a high-profile proposal in San Francisco that is currently embroiled in political controversy. But so far the company has only about 2,000 monthly consumer subscribers to its municipal Wi-Fi services, which executives estimated on Thursday cost an average of $40 per household to deploy. EarthLink is focusing its limited resources on its most lucrative prospects because it takes about as much effort to overcome political and service-provider resistance to municipal Wi-Fi in a small city as it does in a large one with more potential customers, said Burton Group analyst Dave Passmore. For consumers outside large cities, this means one less potential supplier for a local network and less hope of one getting established, he said.

AlphaRed is reporting: "Earthlink last week said it would review operations at its current muni wi-fi networks before deciding whether to expand into more markets. The issue, the company said, is that it isn’t sure the business is going to be profitable."

What's the lesson here?

Short version: Don't bite off more than you can chew!

ELN went whole hog into Muni Wi-Fi, an unproven area for a company that knew next to nothing about (a) running a network; (b) wireless infrastructure. It's one of those times that trials (Test & Measure) would have been eye-opening.

The flip side to the coin is that the window was open and no one knew for how long it would remain open.

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