Municipal Wi-Fi Spending Estimates Down
(10-24) 09:38 PDT New York (AP) —
A leading industry analyst on municipal wireless projects is revising its 2007 spending estimates as cities find their projects costing more and drawing less interest from residential customers than expected.
In an annual State of the Market Report, MuniWireless estimates U.S. expenditures at $329 million for the year, down from the $460 million projection made for 2007 last year. MuniWireless founder Esme Vos cited several factors, including cities and service providers changing their strategies and technical hurdles requiring additional hardware.
But Vos notes the revised estimate is still 35 percent above the $243 million spent in 2006 on projects to blanket all or parts of cities with Wi-Fi and other wireless Internet access.
She also expects annual growth rates of 33 percent to 48 percent until 2010. Spending for 2009 is now projected at $687 million, compared with the $1.76 billion made in last year’s report.
“It may not be the 100 percent year-over-year growth municipalities and service providers were predicting just a year ago, but it’s still a large and fast-growing market,” Vos wrote in the report issued this week.
Service providers have been questioning whether the networks will generate enough revenue to justify the multimillion-dollar investments to build and maintain them. EarthLink Inc., one of the chief evangelists of municipal Wi-Fi, has decided it can no longer afford to foot the bill by itself.
Doubts aside, Vos said she expects market demand to continue as city workers successfully use wireless systems to read electric meters and file building inspection reports remotely and as communities become more innovative in tapping federal and state grants.
She also said Wi-Fi-enabled gadgets like Apple Inc.’s iPhone should drive demand.
