Subscriber Values Notes: Q4 2004

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

Notes on ISPs
The AOL brand continued to lose subscribers. The AOL dialup business may be an insignificant part of the current market cap, which is why we also show the average for this section without AOL. The AOL brand is behaving like a competitor, not an incumbent, losing subscribers. Time Warner may be more interested in the rapidly growing RoadRunner service.

EarthLink's churn rate for its various subscriber groups are: dialup 5.3 percent, broadband 2.5 percent, and webhosting, 2.4 percent. The company has seen churn rates rise in every area except webhosting.

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Notes on CLECs
This entire sector will be changed radically during 2005 as VoIP takes off.

Monopoly-friendly regulation continues to plague the ISP industry in general, hitting a few CLECs particularly hard.

Charlotte, NC-based US LEC acquired StarNet during Q4, adding several hundred ISP customers.

Monroe, La.-based Century Tel and its subsidiaries operated 2,313,626 telephone access lines, 1,067,817 long distance lines, and served 142,575 DSL lines. Dialup subscribers were not disclosed. The DSL line of business is growing rapidly while the other business areas show virtually no change..

Santa Clara, Calif.-based Covad Communications Group admitted to providing dialup service to over 42,300 customers through its direct sales channel when it last disclosed dialup subscriber numbers. Its DSL subscribership has risen far more slowly than the subscribership of the RBOCs and cable companies as regulatory uncertainty continues, and this is also impacting the company's stock price, which fell from $1.72 on November 16, 2004 to $1.26 on March 23, 2005, a fall of about 25 percent.

Anchorage, Alaska-based General Communications (CGI) competes with the ACS Group (below). General Communications' largest customers are MCI and Sprint. The company reported 112,100 access lines, 101,600 Internet subscribers (65,500 cable broadband and 36,100 dialup), 180,842 cable TV subscribers, 8,000 subscribers of Digital Local Phone Service (DLPS), and 91,300 long distance subscribers for a total of 345,758 subscribers. Subscribers for some lines of business were not disclosed.

Pittsford, NY-based Mpower Communications acquired ICG's communications business in California ("ICG California") on October 22, 2004. It reported no change in number of lines served.

Anchorage, Alaska-based Alaska Communications Systems Group (The ACS Group) served 224,495 access lines (not counting UNE-P and UNE-L). It had 100,657 cellular customers, 47,050 long distance customers, and 47,553 Internet customers. Not counted are advertisers served through the company's directories. The company may be more like a rural ILEC than a CLEC, which could explain why it is doing so well in a pro-monopoly environment.

Reston, Va.-based Talk America Holdings, Inc., more familiarly known as Talk.com, is revamping its entire business in response to rule changes at the FCC, moving customers off SBC's network and onto its own network. Currently, only 25,000 of its 671,000 phone subscribers are on its own network. The company has just begun to offer dialup and DSL with zero DSL subscribers and 22,000 dialup subscribers.

In its SEC filing, the company writes that it offers, "digital subscriber line, or DSL, internet speeds of up to 4.0 megabytes per second download speed and 384 kilobytes per second upload speed in the Detroit, Michigan region where we have deployed our own local networking assets. Generally, we make DSL available to customers who are within 16,500 feet of one of our collocation facilities."

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