October 23, 2007
Muni wireless signals slower growth
Municipal Wi-Fi networks have been suffering from bad reception of the political and economic kind lately.
San Francisco illustrated the two sides of the problem as elected officials said they did not like the terms being offered by Earthlink to set up a network in the city and the internet service provider decided to walk away from the project as its business model led to unsustainable losses in other cities.
A major MuniWireless conference is taking place in Silicon Valley this week and its organisers have issued their annual report on the state of the industry.
While all indicators a year ago were pointing to dramatic growth, says Muniwireless, “a year later, a clearer, and, quite frankly, more sober picture has emerged.”
It estimates 2007 US spending on networks will be $329.4m, down from the $450m it predicted for 2007 a year ago, but still up 35 per cent on actual spending in 2006.
Growth rates of between 33 per cent and 48 per cent are forecast between now and 2010, down from the 100 per cent year-over-year growth expectations of a year ago.
The report blames a number of factors: changes in strategies from a few major cities that delays spending; financial troubles at Earthlink, the most ambitious provider; uncertainty over the right business model; growing pains in deployment and negative press reports causing concern among communities and investors.
However, it highlights a number of more positive factors: counties (compared to cities) accounting for a larger portion of the market; a survey showing people are more positive about the future of Muni wireless and mixed-use networks becoming the norm, where residential, local government, local business and visitor uses for free or paid access emerge.
Concerns remain though. Survey respondents said wireless network performance and unclear return-on-investment scenarios were bigger challenges than a year ago.
