AP News, April 26th, 2007
EarthLink Inc. said Thursday it will study the performance of its municipal wireless Internet networks in four cities _ Philadelphia, New Orleans and California's Anaheim and Milpitas _ before deciding how to move forward with similar Wi-Fi networks elsewhere.
While more cities are expressing interest in striking deals with the company, EarthLink is "not yet able to establish that comfort level" that the investments are really profitable, said Kevin Dotts, EarthLink's chief financial officer.
That doesn't mean EarthLink is pulling the plug on cities under contract, like Houston, which would eventually be the nation's largest network at about 600 square miles, Dotts said. Instead, the company wants to review a range of factors to determine where it would be most profitable to invest what Dotts estimates are up to $40 million a year in capital expenditure.
Such factors include topography _ less dense cities like Atlanta are harder to cover; concentration of households; and alternative revenue opportunities, Dotts said.
He added the company will closely study the four designated markets over the next few months before defining its strategy. He said it will probably focus any expansion on large metropolitan areas like Chicago.
Also Thursday, Atlanta-based EarthLink announced it posted a loss of $29.96 million, or 24 cents per share, in the latest period. A year ago, it had reported earnings of $16.3 million, or 12 cents per share.
Revenue rose to $324.4 million, up 4.7 percent from $309.7 million in the first quarter of 2006.
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EarthLink: http://www.EarthLink.net
