DJ EarthLink CEO Sees Sizable New Business In Muni Wi-Fi Svc
02/09/2006
Dow Jones News Services
(Copyright © 2006 Dow Jones & Company, Inc.)
By Riva Richmond
Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)--EarthLink Inc. (ELNK) has already established itself as the municipal Wi-Fi market leader and intends to leverage that to build a sizable new Internet-access business, Chief Executive Garry Betty said.
"2006 is going to be a year of getting contracts and building out the networks for a very exciting 2007," he said in an interview with Dow Jones Newswires.
During the fourth quarter, EarthLink was awarded contracts to build citywide high-speed wireless networks in Philadelphia and Anaheim, Calif. Those networks are starting to going up now, and the company expects to sign up its first customers in the second quarter. EarthLink will have access to 650,000 homes in Philadelphia and 100,000 in Anaheim, though Betty said on a conference call Thursday that visitors to Disneyland in Anaheim could end up generating more revenue for EarthLink than local residents.
While those contracts will provide some revenue this year, Betty said significant revenue from the Wi-Fi initiative will come in 2007 and will depend on how many city contracts it wins. EarthLink has submitted proposals to provide Wi-Fi services to six more cities and is preparing to compete for many more contracts, including pacts from three urban giants - Chicago, Los Angeles and Atlanta - which are expected to jump on the municipal Wi-Fi bandwagon this year.
On the call, Betty said the company is close to inking a deal with Milwaukee and is one of two finalists in Minneapolis and Portland. It is also competing for contracts in Aurora, Colo., Alexandria, Va., Brookline, Mass., and San Francisco.
"We've got those targeted. We know what we're doing. We're aggressively pursuing them," Betty said in the interview.
In San Francisco, EarthLink is competing against a proposal by Google Inc. (GOOG) to provide consumers with free access to a network supported by ad dollars.
But Betty said: "Don't count us out." San Francisco is small in area - five square miles - and densely populated. As such, building a network there would be four times cheaper than in other cities EarthLink has studied. "We'll see what happens," he said. "We like to compete."
EarthLink is betting heavily on its emerging municipal Wi-Fi business - as well as its Helio wireless initiative, new Internet-calling services and a new DSL and home-phone bundle it's offering through a partnership with Covad Communications Group Inc. (DVW) - to end a long period of declining revenue.
"2006 is going to be a transformative year. Our expectation is we're going to be seen as a growth company again," Betty said. After laying plans in 2005, "now we can focus on execution efforts instead of just talking about what we want to be when we grow up."
-Riva Richmond, Dow Jones Newswires; 201-938-5670; riva.richmond@dowjones.com
(END) Dow Jones Newswires
02-09-06 1209ET
Copyright (c) 2006 Dow Jones & Company, Inc. |
