Here’s a blast from the past. EarthLink, once a giant of the US dial-up market, has made yet another attempt to adapt its model to the mobile broadband era, launching services as an MVNO of Clearwire.
This came a few days after Sprint (the largest user of Clearwire’s network) published new terms and conditions for customers, which indicated it would soon be ending support for its WiMAX offerings and effectively shifting subscribers to its new LTE platform. Clearwire itself, of course, is migrating from WiMAX to LTE, but its progress depends on future ownership and funding, both of which are currently uncertain because of the rival bids from Sprint and Dish. In the meantime, the firm’s finances continue to struggle, and it needs any revenue it can eke out of the WiMAX system.
That will make EarthLink a welcome ally, as it will use the WiMAX platform to support its two new plans ‘ one for $29.95 per month with 2Gbytes of data and speeds up to 3Mbps; the other for $49.95 per month with twice the data allowance and speed. Both plans are being offered on a no-contract basis and customers can add incremental data packages starting at $4.95 per month at any time.
This has echoes of the days when EarthLink sought to be a major player in broadband wireless, leveraging its extensive dial-up base and brand. It formed a joint venture with SK Telecom of Korea to launch the Helio MVNO, and also invested heavily in running municipal Wi-Fi networks. Both these approaches were highly fashionable in the US in the middle of the last decade, and were seen as important ways for new players to offer wireless services without investing in spectrum and networks. However, neither lived up to their promise, and amid a wave of failed MVNOs and abandoned metro Wi-Fi initiatives, EarthLink too exited these businesses. It pulled out of key Wi-Fi projects like that in Philadelphia in 2007 and Helio was sold to Virgin Mobile in 2008.
Of its latest bet on a failing technology, EarthLink said in a statement: “Consumers’ interest in mobile broadband continues to grow, so we are excited to add these 4G wireless data plans to our robust portfolio. Pairing Clearwire’s leadership in 4G with our outstanding reputation for customer care provides more opportunity to satisfy customer needs and aligns with our long term strategy.”
Investors might question what that long term strategy actually is. Over the past year, EarthLink has been trying to reduce its dependence on an ISP business where it is increasingly engaged in a price war, to become an IT services provider, harnessing its extensive back end infrastructure. Last week, it acquired cloud services firm CenterBeam for $22m, for instance. So promising national wireless broadband access ‘ based on a legacy platform and on fixed/portable use rather than high profile mobile devices ‘ seems a retrograde step into a part of the telecoms sector where there are few profits to be made.