Tempe’s much-hyped citywide wireless Internet service is floundering. Hardly any customers signed up to the system even as elected officials touted it as a major technological accomplishment. Yet the city is now cheering as an investment firm has announced it’s moving to buy the system, improve customer service and boost subscriptions.
Telescape Communications is exploring a buyout and has heard of the complaints from customers, chairman Tad Neeley told the City Council in a meeting. Exasperated elected officials said they were tired of angry phone calls.
“As Bill Clinton would say, ‘I feel your pain,’” Neeley said.
Councilman Ben Arredondo shot back: “You can’t feel my pain because you don’t have my phone.”
The city’s ambitious wireless network has attracted just 500 subscribers after three years because of weak signals, bad customer service and no marketing, Neeley said. System owner Kite Networks doesn’t have deep enough pockets to staff a customer service center and market it, Neeley said. His California-based firm has 130,000 subscribers and an established company structure to serve Tempe’s network, he said.
Telescape is expecting at least 10,000 Tempe customers.
The Tempe system’s woes are largely due to Kite’s limited finances and not major flaws in the technology, Neeley said.
“This is a great network that’s so underutilized,” he said.
Telescape needs a couple months to continue researching a sale and close the deal, Neeley said.
Mississippi-based Kite ran into problems from the start. It had to install three times as many transmitters as it expected because signals weren’t getting into homes. That resulted in substantially higher costs. The company paid all the expenses, as the city only allows Kite to post its equipment on city light poles.
It’s also moved into parts of Chandler and announced 1 ½ years ago it would move into Gilbert. But nothing has happened in Gilbert.
“Last we’ve heard, they indicated they still want to put up the network in Gilbert,” town spokesman Greg Svelund said.
Wireless networks have struggled across much of the nation. Many cities have tried to create networks at taxpayer expense or allow private companies to do so with private money. Technical problems have plagued many systems and subscribers haven’t shown much enthusiasm.
Neeley said he’s optimistic his firm can make the network operate better — and profitably. If the company buys the Tempe network from Kite, it would likely expand to other Valley cities.
“We don’t think metro wi-fi makes sense in every market but we think it makes sense in this metro,” he said.
Kite officials could not be immediately reached for comment.