January 31st, 2006
Why EarthLink should acquire Boingo
Broadband provider EarthLink has won the bid to build a citywide Wi-Fi network in Philadelphia.
Yesterday, EarthLink announced that it is partnering with broadband access wholesaler Covad Communications to offer VoIP. The service, which will cost $69.95 for the top tier package, will feature unlimited calling within the U.S., plus fast 8mbps download and 1mbps upload DSL.
What should EarthLink do next? I say they ought to buy Wi-Fi hotspot and infrastructure provider Boingo Wireless.
Why? So EarthLink can offer triple-play, their own way. I am talking Wi-Fi, VoIP, and broadband Internet access.
Could be done. Just so happens that Boingo founder and chairperson Sky Dayton (pictured above, in between the logos of EarthLink and Boingo), founded EarthLink and still sits on their Board. He could be the catalyst that could kick such a deal into motion.
I happen to think EarthLink is very smart. More than almost any other technology company - telecom sector or no - they are excellent at a reality-check assessment of what services they might be outgunned in - and what alternative means they can use to offer what they feel they need to compete.
It’s important to recognize that because EarthLink does not own their broadband pipes, they have to use alternate routes to get to the home. As my colleague Marguerite Reardon explained yesterday, both the U.S. Supreme Court and the Federal Communications Commission ruled last year that DSL and cable modem providers do not have to share their infrastructure with competitors such as EarthLink.
EarthLink smartly looked for competitors to those companies, and came up with Covad. EarthLink built an alliance that maximizes Covad’s wholesale broadband inventory, while extending their own portfolio to a bundled service package of broadband Internet service access and VoIP. EarthLink’s rivals are doing bundles, so EarthLink is executing that same strategy.
But they are doing it on their own terms.
Terms which would make a nice triple play if Boingo were under the same corporate roof.
Russell Shaw is an enterprise computing journalist, analyst and author based in Portland, Oregon. See his full profile and disclosure of his industry affiliations.
