Gary Kim, Contributing Editor of TMCnet says brands matter, even in municipal broadband projects. While most analyses of municipal broadband (fiber to the home projects, generally) or municipal WiFi have rightly focused on the payback models, there is another factor; branding.
He quotes Yankee Group analyst Benoit Felten who says that citizens and homeowners are not necessarily intrigued by government-backed infrastructure projects, and tend to prefer buying from recognized brands.
In late 2008, Amsterdam municipal broadband project Citynet reported that although it had reached its goal of passing 43,000 homes with the network, less than 10,000 residents actually allowed a drop cable to be put into place and only 3,000 subscribed to a service.So Citynet is hoping that getting Dutch incumbent KPN on the network as a service provider will boost penetration.
Similarly, the Pau Broadband Country project in the South of France had less than 3,000 customers out of 45,000 homes passed until early 2007 when national service providers Neuf (now SFR) started offering services there. In less than a year, the number of customers more than doubled and is now set to reach 10,000 shortly.
All of those experiences suggest that it isn’t enough to attract financing and build a network. In the communications services business, as in other businesses, consumers have brand preferences.
Oddly enough, it appears the best way to boost penetration for a municipal WiFi or broadband network is to entice well-known brands to participate.
