11 July 2014

In May, council officials celebrated their deal with Gowex which is now up in the air. From left to right: Mike Keenan director at Real Wireless; Philip Brown Gowex CEO for North Europe; Newcastle council leader Nick Forbes; and Gateshead council leader Mick Henry.

Several British cities may be left in the lurch following the descent of Spanish Wi-Fi supplier Gowex into receivership.

Newcastle and Gateshead followed Edinburgh, Dublin, New York, Paris and San Francisco into hiring Gowex to provide free public access Wi-Fi in downtown areas in return for a share of the income from advertising and the sale of user information.

Gowex CEO Jenaro Garcia quit the firm after accepting full responsibility for providing false accounts for at least the past four years.

His resignation came after a US analyst alleged Gowex had inflated its revenues and was basically worthless. It said Gowex’s revenues were at best just 10 per cent of what it claimed.

In May, city councils in Newcastle and Gateshead announced a deal with Gowex to turn Tyneside into a major public Wi-Fi hotspot. In a joint statement, the councils said they were “naturally concerned and very disappointed” at the news that Gowex in Spain was in financial difficulties.

“The contract Newcastle and Gateshead have with Gowex (UK) Ltd did not rely on any financial investment from either council so there will be no financial loss to the council tax payer. Delivery under the contract with Gowex (UK) Ltd has not started. We are waiting for confirmation from Gowex (UK) Ltd before any further decisions are taken to progress this work.”

The councils added that the public Wi-Fi contract was just one element of a wider programme to deliver high speed broadband in the city, and that they “remain committed to this important programme”.

In Ireland, Gowex has been supplying Dubliners with free downloads at 512kbps and uploads at 128kbps since January 2013. Users can also buy access up to 6Mbps downloads.

In a statement, Dublin City Council said: “We are assured that [Gowex] will continue to deliver the service in Dublin. It is expected that as the formal processes pertaining to bankruptcy proceed, we will become clearer as to how long this continuing provision shall be. The concession was given for a five year period with a break clause on both sides after two years.”