The business model of municipal WiFi Networks
Posted by Isidoros Passas at 30 August 2006 in Digital Cities
In this latest article that is presented in TechNewsWorld by Paul Korzeniowski main implementation reasons and key success factors of municipal WiFi Networks are presented. In his article is arguing that throughout the world — municipalities are adding broadband WiFi to their list of services for different reasons and definitely through different financial means.
A few factors are pushing local governments into the broadband access market. “Cities have to upgrade their internal networks and view municipal WiFi as a cost-effective way to fund such projects,” noted Craig Mathias, principal at market research firm Farpoint Group. Cities already rely on wireless networks to support a variety of services, such as police, fire and emergency medical technicians. Theoretically, these cities can lower the cost of these services by building a common WAN and then paying off that investment by charging residential Internet fees.
Municipalities through the implementation of those networks are trying to close the digital divide between the rich and the poor, the urban and the rural, and view their networks as a means to close those gaps. Local governments also view broadband as something that’s required to keep up with the Joneses, so to speak, in attracting businesses.
Some local governments hope the services will become money makers for them. Many have partnered with Internet Service Providers, which build and run the networks while sharing revenue with municipalities.
While there is growing interest in municipal WiFi services, there are also some hurdles that local governments need to clear. Initially, carriers were concerned that cities would run these networks themselves and subsidize any losses with taxpayer revenue. Increasingly, cities have decided to partner with rather than compete against telecommunications solutions.
Consequently, local governments are tinkering with a wide variety of business models to try and identify those that are most viable. Certain cities view WiFi service as a civic duty, something that should be free to constituents, but the free model has encountered a few bumps. Advertising-based models, such as the one that Google and the city of San Francisco plan to roll out, are also starting to take hold. The business model that seems to be gaining the most attention is a hybrid service with cities offering low speed (300 Kbps) access for free to low income residents, and marketing 1 Mbps broadband services for $10 to $20 per month to consumers and businesses.
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Read the whole article on technewsworld.com