Subscriber Values: May 2003

ISP-Planet Staff [May 29, 2003]

EarthLink (NASDAQ: ELNK) said its subscribers consist of 4.2 million dialup, 835,000 broadband (in several access technologies), and 171,000 webhosting or business accounts. Broadband is growing as webhosting and dialup decline.

United Online (NASDAQ: UNTD) continued to rise as its total number of paying subscribers rose to 2.4 million..

The stock of AOL (NYSE: AOL) rose. AOL failed to disclose the size of its CompuServe user base, and Steve Case denied that AOLTW is considering spinning off the ISP. AOL U.S. subscribers were 26.2 million, down from 26.5 million a year ago, with only about 80 percent on regular payment plans. AOL Europe had 6.3 million subscribers. RoadRunner had 2.686 million residential subscribers and, interestingly, 90,000 commercial subscribers.

Internet America (OTCBB: GEEK) admitted that its subscriber base continues to shrink as it cuts costs and slows expansion. The stock, however, was unchanged, as the markets seem to approve the strategy.

Subscriber numbers are from ISP-Planet's list of Top U.S. ISPs and from company reports (and are generally as of March 31, 2002). Market capitalization data is as of market close, Tuesday May 27, 2003, as reported on the Wall Street Research Network.

OmniSky, a mobile wireless ISP, was in Chapter 11 when it was acquired by EarthLink in January, 2002. At its peak, OmniSky was valued at $1.6 billion. Forbes estimates that in 2001, EarthLink paid about $150 per subscriber for 36 other ISPs with a total subscriber count of 304,000, a total of $46 million. If Forbes' estimates are correct, the average size of the acquired ISPs would be 8,500 subscribers. This data suggests that EarthLink pays the same price for dialup as it does mobile wireless subscribers.

Fullnet (NASDAQ: FULO) declared the price of several purchases made during 2001. We list them here because they are the most recent reliable data for the purchase of small ISPs that we have seen. All of the small ISPs listed provided services to both business and residential customers. Unfortunately, the company did not publish subscriber numbers and is therefore not on our list of subscriber values.

Go America's (NASDAQ: GOAM) stock rose rapidly on Wednesday, May 28, the day after we recorded market capitalization data, on news that the NASDAQ had given the company a 90 day grace period (through August 25, 2003) to comply with listing requirements, postponing delisting hearings. This rise is not reflected in the market cap recorded below, which is as of May 27, 2003, like all stocks on this page. The stock had already risen on May 27th as the company sold certain business lines.

Motient (OTCBB: MNCPE) stock continued to rise rapidly. The company is re-examining pre-bankruptcy accounting and cannot file up-to-date financial accounts. It has therefore been removed from our list temporarily

RCN (NASDAQ: RCNC) completed the sale of its New Jersey incumbent cable franchise. Its dialup subscribership decreased sharply to 267,250, barely faster than its broadband subscribership rose (to 174,125).

Our CLEC listings require close examination. We are comparing a wide variety of companies, including Covad, and we welcome your comments.

Charlotte, NC-based US LEC (NASDAQ:CLEC) now serves 10,998 enterprise customers. As its subscribers rose about 10 percent (almost 50 percent at an annual rate) the company's stock doubled.

Pittsford, NY-based Mpower Communications (OTCBB:MPOW) continues to sell off operations, and its stock has doubled. It has sold more subscribers since March 31, 2003, when it had 265,000.

Monroe, La.-based Century Tel (NYSE: CTL) and its subsidiaries operated 2.4 million telephone access lines, 689,500 long distance lines, as of March 31, 2003. As of December 31, 2002, it had 131,500 dialup Internet lines and 47,900 DSL lines but did not update those numbers.

Reston, Va.-based Talk America Holdings, Inc., more familiarly known as Talk.com (NASDAQ: TALK), grew its customer base to 402,300 bundled long distance and local service customers as of March 31, 2003. Although it focuses on the bundled service, the company also served 460,000 customers who purchase long distance service only as of December 31, 2002.

Santa Clara, Calif.-based Covad Communications Group (OTC BB: COVD) has seen its stock hammered by regulatory uncertainty this year, but also almost back to its pre-FCC ruling valuation. On February 19, the stock closed at 1.33; on February 21, it closed at 0.72. Shares traded during February 20th and 21st were about equal to one month's average trading volume. This week, it has been between 1.08 and 1.13. Nevertheless, the company continues to add subscribers and now has 465,000, including a previously undisclosed dialup subscriber base of 48,000.

Anchorage, Alaska-based General Communications (CGI) (NASDAQ: GNCMA) competes with the ACS Group (below). General Communications' largest customers are WorldCom and Sprint. The company serves 98,900 telephone access lines, 71,600 Internet subscribers (including 38,600 cable broadband subscribers), 136,300 basic cable subscribers, 30,200 digital cable subscribers, 1,389 hotel rooms wired for video on demand, and 87,300 messaging subscribers, for a total of 425,689 subscribers.

Anchorage, Alaska-based Alaska Communications Systems Group (The ACS Group) (NASDAQ: ALSK) serves 231,832 retail access lines, 19,619 wholesale access lines, 82,000 cellular customers, 70,000 long distance customers (this number as of December 31, 2002), as well as 40,000 "Internet" subscribers (combined dialup and DSL) for a total of 519,551 customers. Not counted are 13,500 advertisers served through the company's directories. The company's telephone directories serve about 95 percent of Alaska's population.

Waynesboro, Virginia-based NTELOS Corp (NASDAQ: NTLOQ) is in Chapter 11, which is why its market cap is virutally zero. It continues to file regular reports with the SEC, however. It serves 279,700 digital PCS customers and 97,800 combined ILEC and CLEC access lines.

Not on the list
When the company last reported detailed numbers, FASTNET (NASDAQ:FSST) provided services to 2,164 enterprise customers, 26,276 SOHO customers, and 7,014 webhosting customers. The company closed several acquisitions recently and is involved in several contract disputes that are fully disclosed in its latest SEC filing.

New Haven, Conn.-based DSL.net (NASDAQ:DSLN) completed its purchase of Network Access Solutions on November 27, 2002. On December 31, 2002, the company served approximately 22,100 installed broadband subscriber lines. It has not released subscriber numbers since.

Notes
At this point in time, most ISPs and CLECs have filed financial disclosures concerning their subscriber numbers as of March 31, 2003, and we use those numbers in our research.

This page is intended as a reference guide, which is why we show not only the results of our calculations but also our methods of making the calculations. Readers can rearrange the numbers as they wish.

We recently were asked what was the most expensive ISP purchase ever in per-subscriber prices. If you have a suggestion, do e-mail us. We guessed that NTT's purchase of 400,000 webhosting accounts at Verio for $5.5 billion (possibly more if you include the price of the stake NTT already had at the time) at $13,750 per subscriber. We have heard unconfirmed rumors of per-subscriber prices as high as $30,000 during the boom. These days, the sale prices listed in the charts above are probably a better guide, showing prices of $45 to $156 during 2001.

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