Search:  

 
 
   News
newer
story category Earthlink Free Of Money Pit Helio -- Now What?
Virgin Media snaps up MVNO for a cool $39 million....
(old news - 04:23PM Friday Jun 27 2008)
tags: business · wireless · trouble · EarthLink
Aside from their failed investment in municipal Wi-Fi and their unproductive investment in BPL (broadband over powerline technology), one of the biggest money sinks for the teetering Earthlink was Helio, an MVNO (Mobile Virtual Network Operator) they jointly ran with Korea Telecom. Today it was announced that Virgin Media purchased Helio for the rock-bottom price of $39 million.

While many are rightly focusing on the fact that this all but means the death of MVNOs (you surely recall the implosion of Amp'd), I remain morbidly fascinated in seeing what the stumbling corpse of Earthlink (who stopped funding Helio late last year) will do next. They lost $80 million on Muni-Fi last year, BPL is going nowhere, they can't share access to next-generation broadband networks, and their dial-up customers continue to flee in droves.


All of these options were supposed to represent Earthlink's multi-pronged approach at countering the incumbent stranglehold on the terrestrial and wireless broadband markets, and all have failed spectacularly. So now what?

What's the latest on the Earthlink death watch pool? Put me down for October of 2008.

Related:
  1. Earthlink Backs Out of San Fran Wi-Fi
  2. Is EarthLink Exiting the Wi-Fi Industry?
  3. EarthLink a no-show at Philly Wi-Fi hearing
  4. Earthlink Lost $80 Million On Muni-Fi Last Year
  5. Corpus Christi Finally Gives Up on Earthlink
  6. 2 out of 5 Cities Take Wi-Fi Back from Earthlink
  7. New Orleans Opts To End Wi-Fi Network
  8. Earthlink Closing Philly Wi-Fi Network June 12
Forums » Earthlink Free Of Money Pit Helio -- Now What?
view: topics flat text 
Post a:
DoRight

join:2007-07-20
Mechanicsburg, PA
·Comcast
·Sprint Mobile Broa..
·Verizon FIOS


1 edit

I say 1st Qtr 2009

I give Earthlink less then a year... I would think a small company would have better success with FTTH then a larger company anyway. Less overhead and quicker to deploy. I am not impressed with VZC FTTH yet. In the last year they have raised their rates on internet, voice and TV atleast 2 to 3 times.. You can't tell me they had 23 Billion sitting around to deploy FIOS nationwide. They have also gotten rid of some discounts that they had when you signed up. I wouldn't expect anything impressive on pricing for another 5 years..

David
No,there is another.
Premium,VIP
join:2002-05-30
Granite City, IL
clubs:

Re: I say 1st Qtr 2009

They might be better off buying small telecom companies (like mom and pop shops) and go that route. Won't make them money overnight but probably wouldn't make them broke either.
DoRight

join:2007-07-20
Mechanicsburg, PA

Re: I say 1st Qtr 2009

You mean like IVC? Illinois Valley Cellular.. lol

David
No,there is another.
Premium,VIP
join:2002-05-30
Granite City, IL
clubs:

Re: I say 1st Qtr 2009

no, like the one down by o'fallon, IL (HTC telecomm) and Egyptian phone company.

jhacker

join:2001-12-11
Peoria, IL
·Comcast
·Vonage
·Comcast Digital Vo..

said by DoRight See Profile :

You mean like IVC? Illinois Valley Cellular.. lol
No kidding!! Every time I go up there, I drop calls with this Verizon extended roaming partner. Word has it that these companies had a falling out and IVCC likes to screw Verizon customers every chance they get.
DoRight

join:2007-07-20
Mechanicsburg, PA

Re: I say 1st Qtr 2009

They just need to sellout like First Cellular did down in Southern Illinois..

NetAdmin
CCNA

join:2008-05-22

Like these guys: »www.eatel.com/

Just as a point of fact, the linked provider has had FTTH for a couple of years now and is a tiny fraction of a fraction of the size of ATT and the other big boys. Those guys are proof that FTTH is not too expensive to be done.
--
---
Over ten plus years of carrying The Clue Bat...
hottboiinnc
ME

join:2003-10-15
Cleveland, OH

Re: I say 1st Qtr 2009

yah it would be nice if you could actually see what they offer. it wants either your phone number or actual address before anything!
DoRight

join:2007-07-20
Mechanicsburg, PA

2 edits

Re: I say 1st Qtr 2009

EATEL Services

Link to Services and Pricing »www.eatel.com/individualanswer.c···rentID=1
hottboiinnc
ME

join:2003-10-15
Cleveland, OH
·Time Warner Cable
·buckeye cable


1 edit

Re: I say 1st Qtr 2009

the price they want is expensive! my local cable company doesnt even charge those rates for Triple Play! I've never seen a company charge $130 for triple play! always can get a new discount after the 6 months or a year and never start out at $130! Damn!

edit add: some of their news articles sound like VoOD and OnDemand movies is something they invited? 5 seconds to come on most cable companies are that if not they should be!

and since when is CATV going out when it rains or has LOS issues? Qute: Superior picture quality and reliability over our buried fiber-optic network, which is less susceptible than cable to outages caused by bad weather or line-of-sight obstructions /end.

Their major competetor is private as well. Look for Cox to do some hard hitting price drops in that area.
jc100

join:2002-04-10

With those sort of investments, a year would be generous. However, a company can do a 180 if they get the right management. Obviously, it's time Earthlink's shareholders (think it's a publicly traded company?), replace the leadership. Seeing that those in power don't know a thing about internet, this company is doomed. Until they get a board and a CEO with some experience and brains, this is a losing battle. One could have guessed BPL would have failed, Helio was a loss, etc. That wasn't rocket science. Anyone who knew anything about internet and computers could have foreseen these failures.
Mr Matt

join:2008-01-29
Eustis, FL
·Comcast
·Embarq

Earthlink was pushed by the Incumbent LEC's

Around 1999 Earthlink began a program to acquire regional Dial-Up ISP's. In my opinion the company hoped to migrate their Dial-Up customers to Earthlink DSL. The Incumbent Local Exchange Carriers directly and indirectly made it impossible for Earthlink to reach their objectives. It appears that the ILEC's predatory pricing practices both as competitors and sellers of DSL transmission services to Earthlink made future profitability difficult if not impossible. By charging Earthlink high prices to deliver their signal, while offering DSL Services to Earthlink's Dial-Up customers at lower prices, the ILEC's placed Earthlink in an impossible position. Earthlink found many of their Dial-Up customers converting to Telco DSL rather as they had hoped for, Earthlink DSL. The moral of the story is that one cannot create a successful business model when one of your suppliers is undercutting your pricing and selling to your potential customers directly. I believe that it is unfair to fault Earthlink when their problems resulted from the ILEC's predatory pricing practices. This problem could have been eliminated if Earthlink required ILEC's to sign a non-competitive clause in their contract prohibiting the ILEC from selling DSL services directly to end users. The ILEC would not have been prohibited from selling DSL transmission services to other ISP's.

fatmanskinny
Premium
join:2004-01-04
Wandering
·Comcast Digital Vo..
·Comcast

Re: Earthlink was pushed by the Incumbent LEC's

Add in bad internal management. I worked for them and believe me, they were and may continue to be so middle management heavy, it is insane. Throw in there an executive team that did not know how to capitalize on emerging technology.
--
The only place where Success comes before Work is in the dictionary.
hrobins
Premium
join:2000-10-15
Regina, SK
clubs:

Re: Earthlink was pushed by the Incumbent LEC's

I agree with fatmanskinny! I worked for them in tech support and can tell you a ton of horror stories.

Richard B
Fur It Up

join:2007-06-22
Portland, OR
·Comcast


1 edit
I have to disagree; I was a loyal EarthLink dial up customer. I was originally a Teleport ISP customer in Portland Oregon and left because I knew the local mom and pop ISP could never upgrade the networks for increased customer base. I suffer frequent bottlenecks, busy signals, and dropouts. So when it was time to upgrade to DSL Earthlik was my first choice but the provisioning would take a moth or more. Further more all I was buying was EarthLink logo on a Verizon network. I did not make sense.
EarthLink mistake was not to reinvent itself. They would have done great as a web and service hosting company-offering e-mail, security, domain name and web-hosting solutions compare to the pitiful retail service for telecoms and cable. Instead tried to take the Pan-AM / Branif route hope for government regulation a la Brand X case and Muni WiFi thinking pigging out at the government trough will save them.
Rot in Hell Earthlike your liquidation is richly deserved.
hottboiinnc
ME

join:2003-10-15
Cleveland, OH

Re: Earthlink was pushed by the Incumbent LEC's

Why should earthlink rot in hell? You never stated they did anything wrong to you? Got a lot of grip over a company for no reason-damn!

Richard B
Fur It Up

join:2007-06-22
Portland, OR

Re: Earthlink was pushed by the Incumbent LEC's

Because of eh brand x case. Instead of trying to win new customers in the free market thy tried to live of government regulations and court decisions.
hottboiinnc
ME

join:2003-10-15
Cleveland, OH

Re: Earthlink was pushed by the Incumbent LEC's

LOL WTFE! Not a reason for hating them as much. If it wasnt for most of the ISPs that were run out of business by the Telco's DSL would never be where it is at.

shdesigns
Powered By Infinite Improbabilty Drive
Premium
join:2000-12-01
Stone Mountain, GA
·Atlantic Nexus


1 edit

Mindspring

I had Mindspring, a great local ISP with good tech support and a consistent, reliable connection.

Then EarthStink took over. Tech support became a joke, my modem dies and they send me a crippled buggy one (even more crippled than the Zyxel I had.) Their redback gateways became more and more unreliable.

I had spent hours with their tech support. They were clueless 20-question zombies with an hour wait to talk to them. The mIndspring techs knew their stuff and even showed my how to uncripple their modem.

Mindspring had nice web pages that showed current and planned network issues (you had free dialup as a backup.) Eventually all that went away.

EL offered to upgrade my 1500/256 to 3000/128 at the same rate. No thanks, I need the upload to send files to my server. They refused to offer a lower rate; $50 for 1.5meg was just insane.

Now have an even better ISP. I how get 3500/384 for less than EL with tech support that is immediate.

EarthStink can go down for all I care. They just seem to want to suck money out of you rather than provide service. I heard a tech say the new management is clueless.
--
Scott Henion

Embedded Systems Consultant, shenion on #ATU @irc.freenode.net
SHDesigns home

Rory Conaway



Earthlink WiFi move

Actually, their WiFi move was a good one. Their costs were out of line with their revenue however. Technically, they also gave the wrong expectations of their performance in terms of ubiquitous coverage. However, I do believe it was their future. If I'm Earthlink, I step back, redesign the systems from the ground up and go back at the WiFi model. Let's say that instead of 40 AP's per square mile, they did far fewer but had a higher bandwdith. Then instead of using some indoor unit that cost $60 or more, they used another methodology that guaranteed a specific level of performance. I wish I had their budget. I would have deployed 6 cities for what they paid to deploy in Philadelphia, including Philadelphia. It was their future and they have now probably blown it.
hottboiinnc
ME

join:2003-10-15
Cleveland, OH

Re: Earthlink WiFi move

Earthlink used an outdoor carrier class brand named Troops. The product itself has issues. Everyone who uses it has problems they don't do as they claim. They should have used Sky Pilot instead.

Rory Conaway

@cox.net

Re: Earthlink WiFi move

Actually both products are good for their prospective markets. All products also have their quirks. SkyPilot may not have as much throughput as a Tropos but works better over longer ranges. We have had some great designs with SkyPilot that have gotten some national industry success.

As for Tropos, I like the radios and installation but I'm not a fan of the entire network being layer 3. However, that didn't stop them from having many successful installations and an integrated mobility solution. We have a few Tropos radios up and they seem to work very well. In addition, I saw a Tropos radio hit a laptop behind a brick building at 1200'. That's pretty impressive radio performance. We have had successful deployments of both products at Triad Wireless. In fact, we just brought up small Tropos network in Arizona.

Belair has the highest raw throughput. Scottsdale has that. However, a firmware bug means we have to physically go on every pole and pull the power off the radio to reset the firmware. That has never happened with Tropos or SkyPilot.

All three products are good. In summary, you just need to pick the product that works in your application.

KrK
Heavy Artillery For The Little Guy
Premium
join:2000-01-17
Tulsa, OK

Helio was kinda cool

I've got a friend who has that "Transformer" phone. He loves it, he can use internet, phone, texting all unlimited etc on any network etc.

He's not going to be happy....

benc
Premium
join:2007-06-17
Glen Carbon, IL
·Charter Pipeline
·Future Nine Corpor..
·Callcentric
·AT&T Midwest

Re: Helio was kinda cool

said by KrK See Profile :

I've got a friend who has that "Transformer" phone. He loves it, he can use internet, phone, texting all unlimited etc on any network etc.

He's not going to be happy....
Can your friend simply sign up for one of those unlimited plans with one of the major carriers?

KrK
Heavy Artillery For The Little Guy
Premium
join:2000-01-17
Tulsa, OK

Re: Helio was kinda cool

His phone works great here.... or when he's deployed in Afghanistan. According to him, he has no problem getting signal when most people have none on their phones.
hottboiinnc
ME

join:2003-10-15
Cleveland, OH

Re: Helio was kinda cool

Most likely they won't change anything. The only thing that happened was Earthlink sold their shares of Helio. They'll still be a reseller of Sprint and keep the network going.

benc
Premium
join:2007-06-17
Glen Carbon, IL
·Charter Pipeline
·Future Nine Corpor..
·Callcentric
·AT&T Midwest

No Wonder Helio Was A Money Pit

If it weren't for this website, I never would've heard of them.

Where do they market? How do they market? Who is their intended market?

I've never seen a TV ad, or a flyer in the mail. I haven't even seen any Internet ads for them.

It's no wonder they lost money. How are they supposed to make money when people don't even know it's available?

I would never sign up for it, but this world is big enough that no matter what it is, someone somewhere will buy it.

sivran
Long Live The Suite
Premium
join:2003-09-15
Arlington, TX
clubs:

Re: No Wonder Helio Was A Money Pit

I saw plenty of ads for them.

I thought they were annoying.

benc
Premium
join:2007-06-17
Glen Carbon, IL
·Charter Pipeline
·Future Nine Corpor..
·Callcentric
·AT&T Midwest

Re: No Wonder Helio Was A Money Pit

said by sivran See Profile :

I saw plenty of ads for them.

I thought they were annoying.
Where?

If on TV, what channels?

If on the Internet, what websites?

Have you ever received a flyer in the mail? If so, what demographics describes most of your neighbors?

As for annoying ads, I haven't seen a Helio ad but I've seen other mobile phone operator or MVNO ads that I thought were extremely annoying.

Once, quite my accident, I saw an ad for Boost, an MVNO that sells prepaid service. It was a hip-hop/"gangster" themed ad. Very bad choice, I'm telling you.

Now there's no way I'd want to buy that service now.
hottboiinnc
ME

join:2003-10-15
Cleveland, OH

Re: No Wonder Helio Was A Money Pit

Boost is NOT an MNVO. They're owned by Sprint-Nextel. The same as Virgin Mobile- VM although is a joint venture with someone else. Boost is just the teen-age early 20s prepaid system or for anyone that wants Nextel without the contract.

DrStrange
Technically feasible
Premium
join:2001-07-23
West Hartford, CT
·Stephouse Networks
·magicjack.com
·EarthLink

Maybe the last shot for ELNK?

Now that they've dumped Helio, they need to:

(1) dump their marketing department,

(2) dump middle management and

(3) re-hire US-based techs and tech support [or lease some from some US or Canadian-based call centers]. The techs and tech support people could be put into service without any cutover period, as the offshore support they would be replacing is practically worse than no support at all.

(4) find a copy of the Mindspring Core Values somewhere and use it as the model for customer service in the future.

Some additional tips:

(a) Take as long as you need to take on the phone to resolver the customer's problem.

(b) If the customer sounds tech-literate, transfer them immediately to a higher level tech [because if it were a simple problem, the customer would fix it him/herself]

(c) [my personal favorite] If the customer says they've tried three different modems at the NID and none of them sync, don't tell them they need a new modem!

(5) If someone comes along and tries to sell them on BPL or Muni Wi-fi again, they need to realize that they're no longer a major player in the broadband market and that they don't have the resources to support these ventures. Until they get back into the black [if that ever happens] they need to think about their survival and not about the next big gadget fad.

Otherwise, they'll be gone within a year or two. With their current reputation for abysmal support, no one who researches their broadband options carefully will want them as an ISP.
hottboiinnc
ME

join:2003-10-15
Cleveland, OH
·Time Warner Cable
·buckeye cable

Instead of New Edge Networks

Instead of them buying New Edge Networks they should have bought some smaller ISPs and used their networks; Wireless, small ILECs and CLECs that have their own networks and go from there.

They should also team up with smaller ILECs and be their ISP of choice simliar to what Qwest did with MSN years ago. Let the ILEC provide the connection and Earthlink provide the data part.

Splitpair
Premium
join:2000-07-29
Cow Towne

2 edits

Rats off of a ship

Considering the number of investors dumping the stock at .01 per share I give them two maybe three quarters.

Wayne
--
If you cannot fix it with a buttset and some beanies you ain't a technician.
wildcat man

join:2007-11-03
Kansas City, MO
·Sprint Mobile Broa..

look at the numbers

From a strictly financial perspective, you need to look at a few things (and for those of us who have been with start-ups, this is impt): 1) They have a long-term 20-25% EBITDA margin; 2) They are generating free cash flow of 80-90 million per year over the past 12 months; 3) They have 300+ million cash on hand; 4) They have less total debt than cash (so net debt is negative). All this and a consumer base of over 3.2M subscribers. They need a larger base, perhaps a concentrated base (regionalizing the focus is one option), and combine with a company that needs a better service model (selling out is another option). These are different, but I could just as easily see Cox or Time Warner (who need out of region access) as I could see getting bought out by Qwest (it's not dilutive). It would be an interesting acquisition for a company like US Cellular if the regional concentration lines up.
hottboiinnc
ME

join:2003-10-15
Cleveland, OH

Re: look at the numbers

TWC and Cox offer service well beyond regions. their both national companies not regional. I could see Qwest being taken over by Cox or TWC though. The same as Cinci Bell did in Ohio with an overbuilding cable company.
wildcat man

join:2007-11-03
Kansas City, MO
·Sprint Mobile Broa..

Re: look at the numbers

If TWC and Cox offer service out of region, it's a very small part of the revenue streams. It would be a much more strategic decision to compete in Detroit or Pittsburgh, for example, for either of these companies. Outside of some selected out of franchise overbuilds in a few states, it's still something that they need. Cox taking over Qwest would be a real problem - Omaha and Phoenix overlap.
hottboiinnc
ME

join:2003-10-15
Cleveland, OH
·Time Warner Cable
·buckeye cable

Re: look at the numbers

It wouldn't be a real problem. Cinci bell did it in Ohio. They took over an area where they already had service. They serviced the area with phone service, and about the over building cable company a Muni from the town. instead of keeping the copper network up to date they're slowly moving everything over to HFC. brand new network easily able to be moved to FTTH to compete with TWC on a much larger scale. It can be done just have to know how to do it.

Also Cox is not an over builder. they are only faced with over builders moving into the area. if they have service in an area where generally they don't its because they bought that area's cable company out or they're keeping it for a reason. They offer service in Cleveland Ohio and its the only area in Ohio they have anymore. They compete with ATT very well.
Forums » Earthlink Free Of Money Pit Helio -- Now What?


Saturday, 21-Nov 15:59:02 Terms of Use | Privacy Policy | Hosting by www.nac.net - DSL,Hosting & Co-lo | feedback | contact
over 10 years online! © 1999-2009 dslreports.com.