EarthLink, the internet service provider that bet the company on municipal Wifi networks some 5 years ago, is selling its citywide ‘Muni’ WiFi business as part of its plans to return to profit after six straight quarterly losses, reports the Financial Times. The Muni WiFi business lost $32.1m in the latest quarter, compared with a loss of $7m in the year-ago quarter.
The decision follows a strategic review of the Muni WiFi business ordered by Rolla Huff shortly after he took over as chief executive in June and is likely to cast a further shadow over plans by other cities to roll-out free or low-cost municipal WiFi networks.
Rolla Huff, the Internet Service provider’s new CEO, said Thursday that the firm would focus on dialup and digital subscriber line ISP business.
EarthLink halted work on new Muni WiFi projects in November and took the decision at the end of December to put the assets up for sale. EarthLink has been, “actively working to determine if there are viable outside buyers for the assets or if the cities themselves are interested in the assets,” he said.
The company raised its forecast for earnings before interest, taxes, depreciation, amortization and stock-based compensation by $10m to as much as $250m in 2008. Investors reacted positively to the latest cost cutting moves and raised projections lifting EarthLink’s stock price by 63 cents, or 9.5 per cent, to $7.30 at in morning trading on the Nasdaq – the biggest gain since April 2005.
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Earthlink’s problem was their high prices for internet service, they were not competitive with the likes of AT&T, etc.
Left by chargernut69 on February 8th, 2008