This morning, Vonage announced a partnership with EarthLink that would involve resellng of EarthLink's municipal wireless services in several markets.
As one who has frequently maintained that Vonage needs to start offering bundled services to compete with its major broadband competitors, I recognize that this is a needed first step.
A first step, but barely a toe [...]
Earthlink's visionary CEO Gary Betty has died. He was only 49.
While I did not know Gary, I knew much of the fruits of his labors.
I've always admired Atlanta-based Earthlink as a resourceful, honest and successful company who managed to battle the cable and telco Internet Service Provider giants deftfully but never without forgetting the [...]
As part of the on-going trend of big money VC rounds, broadband-over-wireline company, Current Communications raised another $130 million, this time from General Electric, TXU and Sensus Metering Systems. The company in 2005 had received about $100 million from Google, Earthlink and Goldman Sachs.
The latest funding news was dug-up by Wired News. Current, currently provides BPL in Cincinnati and is working with TXU to provide similar service in Dallas. The company is also bidding for advanced wireless spectrum as part of a consortium called, Pop Wireless.
Broadband over Powerline is a technology that allows consumers to connect to the internet by plugging a special modem into their electric outlet, which is part of a power company’s IP network. FCC has seen BPL as the third pipe into the home, though, that has still remained more hope than reality. We have been skeptical of BPL for a while, and that position hasn’t changed. Despite raising hundreds of millions, companies like Current have still not gained any meaningful traction in the marketplace.
Things are getting a bit dicey in the MVNO Land. Helio is costing Earthlink some profits. Amp’d is d’amp’d. And now reports are trickling in about Mobile ESPN having some difficulties in that attracting sports fans to their service. Walt Disney & Company owned service will have 30,000 users by end of 2006, lagging the 240,000-user target for the current year, a report from Merrill Lynch says.
Merrill Lynch analyst Jessica Reif Cohen says it will cost the company as much as $135 million, and they should shut it down. (I wonder if she has taken into account the airtime being devoted to the service on ESPN, instead of taking paid ads. )
Rafat thinks they should tweak the model, but not shut it down this early in the game. I think getting cooler phones should be a start. I had stopped by at Best Buy to check out the service, but there was not a single handset that would make me sign up for the service.
It’s no secret that Earthlink’s spending loads in an attempt to push new services like muni WiFi, VoIP, web 2.0 services, and an MVNO.
The company released earnings for its second quarter and reported a net income of $16.6 million, down from $43.8 million from the year before. Revenues for the quarter came in at $323.10 million, pretty flat from the previous year’s quarter. The company’s net income drop is not an insignificant loss due to the company’s eager spending spree.
Earthlink’s MVNO Helio cost the company about $13.3 million in lost net income. For the third quarter, Earthlink predicted it will come between roughly break even or losing $10 million in net income, with losses of $20 million to $25 million from Helio. For the full year the company predicted between breaking-even and earning $20 million, with Helio losses of $75 million to $85 million. Earthlink is spending liberally on Helio, but if it doesn’t start bringing in customers soon, things could get very ugly. Of course take into account the cost of those Muni Fi buildouts, you get the drift.
The Municipal Wireless market just got more interesting. Sources close to MetroFi, a Sunnyvale, California-based start-up tell us that the company has teamed up with AT&T to design, build and operate free wireless networks in different cities. The deal is with AT&T Enterprise Services division of AT&T. Riverside, California will be first city to get a service bid from the new alliance.
This is huge deal for MetroFi, which is building wireless networks in about a dozen cities around the US. MetroFi has been viewed as a laggard in the space, even though it has snagged some big cities. The company earlier this month won a bid to build and operate a big network in Portland, Oregon. It has similar deals with San Jose, California as well. More than MetroFi, the deal could have major impact on the whole Muni Wireless space.
First of all it validates the MuniFi movement, which so far has been vehemently opposed by the incumbents. A volte face if there was any. Secondly, it also puts a serious crimp in the plans of others, namely Earthlink, which have been counting on the MuniFi business to future proof themselves.
Today is the deadline for updating applications for the upcoming wireless spectrum auction, but we thought we’d dig through some more spectrum documents. One bidding team caught our eye. Telecom investor Willian Berkman couldn’t let Paul Allen get all the wireless action without a fight.
According to FCC filings a consortium backed by William Berkman, and the broadband over power lines company Current Communications Group that he co-founded and is Chairman, and including Current investors Goldman Sachs and TXU Utility Services, is looking to bid in the upcoming wireless spectrum in August. As you might remember, Current is also backed by companies interested in wireless–Google and Earthlink.
While Google’s and Earthlink’s individual investments are not disclosed Current has raised over a hundred million in capital to build its BPL network. There was a lot of speculation over Google joining the spectrum auction–this seems as close as the company was willing to get.
While Current refused our requests for the details on their wireless plans, wireless is already being used in conjunction with broadband over powerlines by companies like Motorola and Communication Technologies Inc (ComTek). BPL runs over electrical outlets and is touted for its ease-of-access, though has few deployments to date.
Wireless could help extend those deployments. ComTek’s VP for Broadband, Walt Adams, said in a few cases the company is already powering WiFi hotspots with BPL, and that the company is planning to grow its wireless offering later this year. So if Berkman and Current buy some wireless spectrum, the company’s slow-moving BPL plans could get a real boost.
For now how the consortium plans to use any wireless spectrum in tandem with their BPL plans remains unclear. The application is officially incomplete but the company has until 6PM today to update the filing.
Earthlink’s foray into RSS/Social Bookmarking is hot news of the day, but Atlanta-based company is not done with what is turning out to be a total Web 2.0 makeover. Earthlink’s plans to offer more web-based services.
Craig Forman, President of Earthlink’s Value-Added Services, who was formerly in charge of News and Info at Yahoo, told us that Earthlink has been working on new applications. Earthlink subscribers will soon get a chance to try out another new web based service, Earthlink WebLife, a new photo and media sharing service. The service will come with one GB of storage for its users.
All of the web-based plans are part of Earthlink’s broader scheme to convert from a former dial-up company to a broadband services firm that not only sells broadband, but all broadband applications. Muni WiFi and VoIP are two areas where the company has focused so far, but now it is trying to introduce other applications. Earthlink user base is much more mainstream and as a result, the company is trying to use “web 2.0″ technologies to create simply, yet rich user experiences.
All this development is not cheap. Forman says Earthlink’s investment in value-added services for the web is going to have a material impact on its top line. Muni WiFi might be the biggest investment of the year. But there’s no question that the company has to adapt. It’s the same problem AOL has. They both just hope that spending money, will eventually lead to making it.
Update: Earthlink emailed us to say that the company soft-launched the photo sharing product a few weeks ago. They did mention that in our earlier conversation.
WiFi phones are essentially changing the home-phone landscape, bringing cellular portability and cool into a realm that was once owned by the Bells and later folks like Con-Air and Coby (see: $9.99 special phones at your local drug store). Even though seem to be running a little bit behind schedule put forward by telephone industry leaders.
Not surprisingly, WiFi phones like D-Link’s latest, the $249 DPH-540, are essentially home phones with SIP connectivity to most major VOIP carriers (which means you’ll probably be able to use this thing with Vonage or your Cable company’s VOIP system). Surprisingly, this phone looks like a low-end, clamshell cellphone, which means the size and shape of these things will soon rival even the slimmest Motorola.
Best of all, this phone is compatible with PsipTN, which is a public VOIP telephone system that just may take the big boys down a peg or two. Expect firmware upgrades from D-Link in the next year.
Earthlink has plans to offer WiFi phones. Municipalities are also getting into the act, although only Taipei has created a faux-public network call “Taipei Easy Call” to unwire their offices and schools while making - or not making - a buck selling service to private consumers
Mobile carriers should worry about the trend because, if not today, or tomorrow, eventually the alternative s will get enough traction. If they follow the same design-and-feature curve as the cellphone, it won’t be too difficult to imagine a future where these WiFi things had better end up lying side-by-side with the latest CDMA or GSM phones.
D-Link DPH-540 WiFi Phone
Niall stopped by Earthlink’s SF store last night and snapped these photos. He says the store opended up on Thursday and has been touting DSL, VoIP, Helio, Mindspring, and muni WiFi.
The company thinks that boots-on-the-ground in targeted cities can help convince customers. We’ll see. And if their obvious bid to bring in pissed-off phone and cable customers wasn’t clear enough, they commissioned this not-so-subtle chalk drawing outside. (well that’s my interpretation of it–what’s yours?)
Earthlink’s first muni WiFi network made news when it was launched in Anaheim, California, last week, but Earthlink’s VoIP VP Steve Howe, revealed some interesting news to me in a conversation this week. He says Earthlink plans to start selling WiFi-only phones starting in the fourth quarter of this year. The phones will work over Earthlink’s WiFi networks, and will have a voice plan somewhere between $10 to $25. Users have to pay extra for a data plan. That’s in contrast to the dual cellular-WiFi phones that the company plans to sell with its MVNO Helio, estimated to launch in the beginning of 2007.
Steve says Earthlink has narrowed down the WiFi phone search to two manufacturers, though declined to name which ones. (If you know which ones, or feel like speculating, add your comments.) He says over the past few days the company has been testing Earthlink’s WiFi phones over the company’s Anaheim network and that they’re working well up to 40 miles per hour.
Other companies have been offering WiFi-only phones for some time. Skype and Netgear have a WiFi phone, as does Vonage with UTStarcom. But Earthlink’s voice over WiFi could give a significant boost to these services going mainstream. The service could also boost the demand for Earthlink’s WiFi services, primarily because of the voice-data bundle. Earthlink will have to keep the prices low enough to attract mainstream users. High prices of cellular data services have been the main hindrance to mainstream adoption of such services thus far.
Still, there remain significant hurdles to Earthlink’s WiFi phone plan. Right now the phones are expensive. Steve says Earthlink will have to subsidize the phones for a good while, to push the industry standard below its current hundreds of dollars range. But “this business will get really interesting when the phones get down to the $40 range,” he says. Will this become another drain on Earthlink’s cash reserves? The company is spending like crazy on its municipal wireless projects.
Then there’s the basic risk of the citywide wireless deployments, and the big question: Will networks be able to attract enough subscribers to make enough money! There’s been fair enough discussion over that in recent days, and I wrote about this with an interview with Gary Betty earlier this year. It could happen, but given that the networks are so new, it’s entirely unproven.
Earthlink is also assuming that the price of WiFi phones will come down significantly, which will only happen if they become popular enough to support an economy of scale and a resulting price drop. That’s a more risky proposition and some speculate that WiFi-only phones are only transitional devices on the way to dual-cellular phones. With the Helio dual mode plan, the company can hedge its bet somewhat on the WiFi vs cellular debate.
When I asked him if the company had come into any major fights with cellular providers over the upcoming WiFi phones and cheap voice over WiFi offering planned, he says, “They probably don’t stay awake at night over Earthlink. But maybe they should.†It’s a savvy PR move to act as the savior for disgruntled phone company defectors. The company opened an Earthlink store in Seattle last week, and is planning to open another store in downtown San Francisco at 1 Front Street next week to convince more pissed Bell customers to join them.
In an attempt to better convince all those digruntled phone company customers to sign up with Earthlink, the company plans to open an old fashioned brick and mortar retail outlet later this week in downtown San Francisco. The store, which will likely open Thursday or Friday says spokesperson Chris Morse, will be at 1 Front Street, and is intended to help those fed up with Bells and CableCos learn about Earthlink’s products.
For now its only going to be a test-run open for a month, to see if the company can successfully convert walk-ins. It’s smart to move slowly, given its got to cost a chunk of change to rent a high profile store front in dowtown SF even for a month. But maybe it’ll help the company on its more-than ambitious (some would say foolhardy) quest to sell new types of communications services. Last week the company opened a store in Seattle, and plans to followup in other markets where it sells VoIP landline service.
As Helio officially launches its cell-phone service today, it is useful to point out that some features and service characteristics have the potential to be useful for more than the younger mobile users the EarthLink-SK Telecom joint venture is targeting. About time that someone did all-in-one charging for both talk and data minutes, rather than forcing [...]
I go to a lot of VoIP conferences, and at every one I attend, you hear the gospel of IP Multimedia Systems, or IMS for short.The CTIA show is no exception. In fact, there is a panel going on right at this very minute entitled "IMS: The Technology Roadmap to VoIP Mobility."First, a brief refresher [...]
David Strom is one of those relatively rare, prominent tech journalists who has the scientific credentials to further inform his work. Not only does David hold an M.S. in Operations Research from Stanford, he's written about networking and related technologies for 20 years. Among his many credits, he started Network Computing magazine, and until early [...]
I have this theory about folks who are new to technology, don't know much about a tech company, but maybe see an ad or get word-of-mouth recommendations.More than a few such folks are liable to mis-spell the name of the vendor or service and give up out of a sense of confusion. If they use a [...]
That's the food court at Independence Mall in Philadelphia.Soon, you'll have free Wi-Fi there - and in lots of other locations in the city as well. Yesterday, Philadelphia Mayor John Street announced details of a deal that will bring citywide Wi-Fi to the nation's fifth most populous city.The deal involves EarthLink, as well as Wireless Philadelphia, [...]
Vonage has decided to move from their low-margin, high turnover business (VoIP) to another low-margin, high turnover business (ISPs) when they announced today that they are partnering with EarthLink's municipal wireless Internet networks. Essentially, with this partnership, Vonage is now an ISP or an OEM ISP I suppose. Isn't that grand? Talk about watering your brand, though at this point, Vonage has nothing to lose, especially considering their stock/IPO has tanked and their stock is still way down from the IPO.
According to TMCnet, Vonage, plans to sell Vonage-branded Wi-Fi Internet access through a three-year contract with EarthLink. Vonage will buy Internet access on a wholesale basis from EarthLink, one of the pioneers within the emerging municipal Wi-Fi market. The new Vonage service will be provided in all cities where EarthLink is building, owning and operating municipal wireless networks, such as Anaheim, New Orleans, and Philadelphia.
Later in 2007, Vonage plans to provide hardware, such as a wireless modem device, and other complementary software tools to customers who use the service as an alternative to DSL or cable Internet access. Vonage has also announced a partnership with frog designs inc. to create a unique design for the next generation of Vonage devices. The first to undergo redesign will be Vonage's phone routers.
According to FCC filings a consortium backed by William Berkman, and the broadband over power lines company 
All of the web-based plans are part of Earthlink’s broader scheme to 
