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ëNobody Builds Networks For Freeí

Steven Titch
April 16, 2007, 2:43pm

Even cities that set up municipal networks through private-public partnerships may have to re-assess their promises and expectations, especially when it comes to free service. MetroFi, one of the leading wireless network companies in the municipal space, has told cities it will not offer a tier of free services unless the city agrees to become an anchor tenant on the network. This has proved a setback to leaders in Batavia, Geneva and St. Charles, Ill.–the so-called Tri-Cities–which had been touting wireless as a new way of offering residents "universal free broadband." This was the same Tri-Cities that a few years back proposed a $62 million municipal fiber-to-the-home plan that area residents voted down twice. MetroFi said that while a free, advertising supported tier of wireless access is viable, it cannot by itself support a city-wide network infrastructure. Adrian van Haaftan, MetroFi's vice president of marketing, told Wireless Week, an industry trade publication, that revenues from municipalities must be part of the sales "equation." In other words, even private-public partnerships may be subject to the rules of the marketplace. In the end, it just might behoove cities to step aside and let build out proceed without their "help." Wireless Week reports:
Industry observers don't seem surprised with MetroFi's stance given that municipal Wi-Fi networks offerings are still relatively unproven and it was obvious from the advent of RFPs that business models would evolve as the market matured. [Market research firm] IDC's Godfrey Chua says that at a high level, given a relatively densely populated urban setting, metro-scale Wi-Fi coverage makes sense because the economics are very favorable at around $5 million to $15 million to cover a city. "It's a really cost-effective means of providing wireless access and delivering services," says Chua. "A lot of folks are experimenting with different iterations that should be able to support the cost of the networks. "But our view is that purely ad-supported networks are yet to be proven. Tiered services might work better because the service provider isn't left counting on one revenue stream or one customer type to support their business. They need to be able to play to different market segments. "But the key element is making municipalities anchor tenants. At the end of the day, I don't see service providers building networks for free. Nobody builds networks for free."


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