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Finance starves public WiFi provider - closure threatened

Cold winds are blowing through even "exciting new startup" industries like the wireless hot-spot business in San Francisco - with HereUare giving itself two weeks to find a buyer, or go bust.

Founders say that the closure that threatens HereUare - a pioneer in the essential "back office" software world for wireless internet providers (WISPs) - is purely the economic climate.

In fact, the problem appears to be the sudden interest of big mobile phone companies like T-Mobile, who are getting into the hot-spot arena - but cautiously.

The blow which crippled HereUare was the loss of franchised hot-spots in Starbucks. Back in March, Internet News reported that T-Mobile had taken over the Starbucks WiFi franchise from MobileStar - HereUare's biggest customer.

At some stage, it seems inevitable that some other mobile phone operator will want to follow T-Mobile's lead, and compete on the high street. And when that happens, HereUare founders are confident that they'll be high on the list of people who can solve the problems of enabling roaming.

The trouble is, HereUare doesn't have forever; it needs money inside a fortnight. According to 80211-planet the founders are confident this will happen, quoting as saying VP Steven Cochran as saying: "No one has a system that's been out longer or is more robust. We were the first to do it; we invested two and a half years. There's no system that could top ours. There's some newcomers that have come, but they're not proven."

The site also quotes local WISP watchers as expressing optimism, with Suzzana Ellyn, Wireless Data Research Analyst for ARS, saying: "The Wi-Fi market is perfect for the carriers who've invested millions in 3G to provide a solution today that can offer high speed access to customers."

What Ellyn doesn't say, but is painfully obvious, is that any such carrier will already have its own roaming software, which will be tightly integrated into its existing IT structure. Buying a company like HereUare just to ensure a safe transition for existing customers when they get taken over - up to the point where they decide to use something entirely different - may not look like the bargain of the year to these carriers, who are strapped for investment cash anyway.

HereUare has one asset - its WiFiMetro subsidiary, which owns hot-spots in downtown San Francisco.

The technology is robust: HereUare develops and licenses the eCoinBox, system, "which provides access control, accounting and auditing functions for its global public for-pay Wi-Fi network. This technology makes it easy for others to deploy for-pay networks," says the company. It's been in place for two years.

Cochran says he is already in talks with potential buyers. But he also says that if the deal doesn't go through in 14 days, he'll close down both HereUare and WiFiMetro.