April 10th, 2007
Is MuniFi cropping up a loser? Disappointing signups point to a shift in strategy
Is "MuniFi" living up to the hopes city managers and the companies that build the networks have held out for them? Is the public flocking to take advantage of the networks, are they good enough to compete with cable and telco offerings? Do they improve economics?
GigaOm's Katie Fehrenbacher surveys several recent stories about public nets in Taipei, California and Portland. The news is not good. In Taipei, the world's biggest MuniFi was built by Q-Ware, which told the San Francisco Chronicle the network had brought in an average of 20,000 monthly subscribers ($12 a month) and about 10,000 subscribers with daily, weekly or monthly one-time passes.
Those figures might sound high for some networks, but Q-Ware’s $30 million investment (some say the costs are higher) was supposed to bring in an initial projection of 250,000 average users by the end of last year, and 200,000 average users to break even.
The New York Times took a look at the network last June, and found “just 40,000 of Taipei’s 2.6 million residents have agreed to pay for the service since January.” Does that mean the subscriber numbers have actually dropped over the past several months? Uh-oh.
Lompoc, CA may be a case of a MuniFi that was underinvested. Notes the Lompoc Record:
Weak signals, which delayed the city’s WiFi system for five months, are still plaguing the $3 million Lompoc Net system, although city officials say the customer base is beginning to grow.
All signs that consumer use might not be the way networks support themselves. MuniFi is likely to be used by lower-income people who can't afford better - and will do little to stimulate use among a city's neediest residents.
A major problem is the one that Wi-Fi consultant Craig Settles pointed out to us in January, that “public access of city-wide Wi-Fi networks will be widely viewed as financially the weakest pillar in the business case for municipal wireless,” by the end of 2007. Instead, mobile workforce applications will be muni networks’ big ROI generator, he says.
MuniFi still makes sense for the cost savings and increased efficiencies for government operations. Public access is gravy.
