EarthLink looks for way out of muni Wi-Fi

11 Feb 2008

The US internet service provider EarthLink is exiting the municipal Wi-Fi sector and is seeking a buyer for its existing Wi-Fi operations. EarthLink posted a loss of USD9.5 million in the fourth quarter of 2007 on revenues of USD22.6 million, with the municipal Wi-Fi division largely responsible for the poor performance. The unit reported losses of USD32.1 million in the fourth quarter, up from USD7 million in the final three months of 2006.

EarthLink’s muni Wi-Fi business has been struggling for some time; the firm said last August that it would not be starting work on any new city-wide networks, concentrating instead on the handful of deployments that were already under way in cities such as Philadelphia and New Orleans. Then, in November, the company revealed that it would be making no new investments in its existing networks. Now, during a conference call to discuss the most recent financial results, EarthLink CEO Rolla Huff has revealed that the business will be dropped altogether: ‘We’re actively working to determine if there are viable outside buyers for the assets or if the cities themselves are interested in the assets,’ he said. While EarthLink has struggled to recoup its investments in city-wide networks, with the cities themselves refusing to pay towards the service, other muni Wi-Fi operators are having more success with other business models, signing local authorities or public organisations as anchor tenants or getting the city to contribute towards the network costs.

United States, EarthLink