Though very preliminary, some penetration and survey results for the muni-wireless project in St. Cloud, FL, support the notion that muni broadband could have major disruptive impacts on the broadband duopoly.
In early March, the 15-square mile city, working with HP and Orlando-based MRI, launched a free WiFi service called Cyber Spot. The project’s supporters believe the cost of the network can be supported by cost savings and efficiencies related to an assortment of government operations. If they’re correct, and the early penetration and survey results can be taken at face value (admittedly big “ifs” at this point in time), this “free service paid for by government savings” muni-wireless model could have major implications for incumbents if it proliferates around the country. Here are the numbers that caught my attention:
As of mid-June, 100 days after launch, 55% (5,560) of the city’s households had registered as Cyber Spot users. That strikes me as a big number. The city is projecting that this percentage will increase to a whopping 80% when the system has been active for six months.
Nearly half (48.9%) of respondents in an early May survey said they currently use Cyber Spot as their only connection to the Internet, with 15.2% using it as their primary mode of access, while also retaining a backup service. Another 35.9% used Cyber Spot as their secondary mode of access. Of those retaining a backup service, 68.3% said their ultimate plan was to use the free muni wireless service as their only form of access.
In terms of the primary access service used before signing up for Cyber Spot, 32% of respondents cited dial-up, while DSL and cable-delivered broadband were the primary modes of access for 21.1% and 41.3%, respectively.
From the material I’ve got, its hard to know for sure how to interpret some of the results. For the purposes of this post, I’ll assume that: 1) the “switching” percentages apply equally to broadband and dial-up and; 2) the 68.3% “future switcher” figure applies to both the 15.2% for whom Cyber Spot was their primary access service and the 35.9% for which it was their secondary mode of access.
If the survey results and my assumptions accurately reflect what’s happening and going to happen in the city’s broadband market (again, big “ifs” here), these are potentially scary numbers for incumbents.
The combination of my assumptions and the survey results suggests that 16.8% of the city’s households have already dropped either cable or DSL broadband service, with another 12% planning to do so. That’s a total of 28.8% of homes that will eventually switch from one of the incumbents’ service to the free muni wireless service. That would be half of existing broadband customers served by incumbents if broadband penetration was 57.6%, and more than half if total broadband penetration was lower than that.
Update: After thinking about this a little more, I thought I’d add a more conservative—and probably more realistic—calculation to this exercise—If we apply the 68.3% “future switcher” figure to ONLY the 15.2% for whom Cyber Spot was the primary access mode and NOT to the 35.9% for which it was their secondary access mode, the percentage of St. Cloud homes that would eventually switch from an incumbent broadband service to Cyber Spot falls from 28.8% to 20.3%. While a significant reduction, this is still a pretty big bite out of incumbents’ broadband customer base. Even if total broadband penetration was as high as 60% of homes, that would still give Cyber Spot a third of the total market.
Here are a few other stats from the survey:
When asked to rate the reliability of their cellular service, 51.8% rated it “good or better” (presumably the “better” is compared to Cyber Spot, though this isn’t clear from the material I’ve seen). But an even larger percentage—68%—rated Cyber Spot as “good or better” (again, presumably better than cellular).
The city sells a wireless bridge to boost indoor signal quality for $180. According to the survey, 28.7% of users have purchased this bridge or added some other signal enhancing device.
When asked how they felt about the city providing Cyper Spot as a free service, 93.9% were supportive or very supportive of the service, while 87.4% said they’d encourage other communities to provide this type of service.
Mitch Shapiro at 3:39 PM|Comments(0)
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