Subscriber Values: Q4 2004

by Alex Goldman ISP-Planet Managing Editor [March 25, 2005]

Subscriber numbers are from ISP-Planet's list of Top U.S. ISPs and from company reports (and are as of December 31, 2004). Market capitalization data is as of market close, March 23, 2005, as reported on Yahoo! Finance.

Further notes on ISP data

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

Further notes on CLEC data

US LEC acquired FASTNET, closing on December 17, 2003. The company paid $8.5 million, of which $6 million was cash, for about 3,000 high-value business customers and two data centers, plus 20,000 dialup accounts, some of which also had shared hosting accouts. The purchase price reflects the costs of the data centers as much as anything else, and is therfore not a good guide to current prices for a business that does not, itself, own a data center.

DSL.net says that it paid $9 million in cash and $4 million in debt for the network assets and subscriber lines of Network Access Systems, purchased out of bankruptcy court in a transaction that closed on January 10, 2003. The assets included equipment in 300 central offices and 11,500 DSL subscriber lines. The cost of hiring 78 former NAS employees is not included in the $14 million purchase price. Nevertheless, this shows that broadband subscribers are worth more than dialup, in spite of the fact that dialup subscribers are usually more profitable.

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 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.

—End