Top U.S. ISPs by Subscriber: Q2 2001 - Market Insights

We rank U.S. Consumer ISPs by overall subscriber numbers, regardless of connectivity method. It's that time again to update our ranking. A Sisyphean task perhaps, as the second quarter of the year is a wrap.

by Patricia Fusco Managing Editor ISP-Planet [August 17, 2001]

Nielson Net Ratings says the percentage of U.S. households online as of July 2001 grew 58 percent over last year. According to TRI, the number of U.S. households subscribing to online services rose to 70.7 million during the second quarter of 2001, with the number of free ISP users dropping by 11.3 percent. New users are there for the taking and free ISP access is all but history.

When it comes to growth over first quarter performance this year, in terms of new customer acquired, MSN leads the pack posting a 30 percent increase (left). But MSN fudged the numbers—rolling 1.1 million-plus WebTV subscribers into its total customer count—so these "new" customers were not actually acquired between March and June of this year. As a result, MSN grew its subscriber base by about 8 percent, which still beats America Online's 3.5 percent growth rate. Of course, when it comes to actual new customers, AOL picked up 800,000 users while MSN added about 400,000. EarthLink also showed a respectable growth rate of 2.1 percent, adding about 100,000 new subscribers during the same period.

Free falling
NetZero and Juno subscriber counts represent active users in June. The formerly free ISPs, soon to be collectively known as United Online, trended down by about 14 percent for the second quarter of 2001 on average. Understandable, considering the merger announcement and adjustments in paid service programs by both providers, as well as a typical summer slump in Internet usage.

Of the cable ISPs we track, both Charter and Cablevision outperformed Road Runner and @Home, increasing new users by 22.2 percent and 21.5 percent, respectively. But Road Runner takes the top slot for adding actual new users, increasing its subscriber base by more than 200,000 cable modem users from March to June 2001.

Share and share alike
In terms of market share, AOL remains the dominant player serving one-third of all U.S. users. "Other ISPs," those not listed in our Top 20 Ranking, account for more than 13 percent of the market connecting some 9 million users to the Internet. The Juno-NetZero hybrid ISP, United Online, lurks on the horizon ready to challenge MSN and EarthLink as the second and third largest U.S. ISPs, respectively. But it would take United Online, EarthLink and MSN combined to rival AOL's current market share. Even if such a monster merger became real, these formidable ISPs would collectively possess only 25.6 percent of the market, far behind AOL's 39.8 percent share that includes CompuServe and Gateway.net services.

Cable access provider and reseller @Home remains at the top of the heap in terms of coaxial connections to the Internet. But as indicated above, Road Runner leads this race in when it comes to adding new users to its flock. But Charter and Cablevision outpaced the terrestrial bird when it comes to percent of subscriber growth from the first to second quarter of this year. Of course, Comcast could more than double its subscriber base if it manages to consume AT&T Broadband services in a merger that would humble @Home.

According to FCC analysts, high-speed Internet connections over coaxial cable systems connected 3.6 million users at the end of last year. But according to our Top 20 History, @Home and Road Runner served more than 4.4 million users by the end of 2000. Why the discrepancy? Perhaps the FCC's connection speed qualifiers does not translate well to shared systems, where access speeds can vary. Either that, or some federal bureaucrat needs to take the shoes off and count with the toes, too.

Wireless worthy?
Most independent ISPs know that they have been outmaneuvered by Regional Bells when it comes to providing digital subscriber line services and few access providers have been invited to the cable access party. Recent reports paint a gloomy picture for small ISPs trying to stay in the broadband game. Even though some analysts ignore fixed wireless high-speed access, we would like to begin to breakout market statistics for this class of service.

If your ISP currently offers wireless broadband access, send and e-mail to editors@isp-planet.com that includes your ISPs name, URL, and a rounded number of users (or fill out the form below).

We'll begin tracking this class of service as data allows. (Mobile, cellular, and digital phone service providers need not apply.)

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