Subscriber Values: April 2003

ISP-Planet Staff [April 10, 2003]

EarthLink (NASDAQ: ELNK) said its subscribers consist of 4,035,000 dialup, 779,000 broadband (in several access technologies), and 175,000 webhosting or business accounts.

United Online (NASDAQ: UNTD) continued to rise. The acquisition of BlueLight from KMart, which closed on November 4, 2002, added about 176,000 paying users.

The stock of AOL (NYSE: AOL) fell. AOL subscriber numbers fell by roughly the same percentage as the stock as AOL failed to disclose the size of its CompuServe user base.

Internet America (OTCBB: GEEK) admitted that its subscriber base is shrinking as it cuts costs and slows expansion. The stock, however, continued to rise, 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 December 31, 2002). Market capitalization data is as of market close, Monday April 7, 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 was unchanged. The company has not yet revealed subscriber numbers as of December 31, 2002.

Motient (OTCBB: MNCPE) stock rose sharply. 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) rose as the company focused on cost cutting and sold a suburban cable franchise (which included 16,381 broadband subscribers). Its dialup subscribership decreased sharply to 281,145, faster than its broadband subscribership rose (to 160,403).

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

Little Rock, Ark.-based Alltel Corp. (NYSE: AT) left the list because it has completed its plan to exit the CLEC business. The company is now a wireless ILEC.

Charlotte, NC-based US LEC (NASDAQ:CLEC) now serves about 10,000 enterprise customers, but did not provide further details. On April 9, 2003, the company announced that it had been approved for a return to the main NASDAQ board, a step up from the NASDAQ Small Market.

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.

Pittsford, NY-based Mpower Communications (OTCBB:MPOW) has sold many of its operations on the East Coast and the midwest, and now serves Los Angeles, San Diego, Las Vegas, Northern California and Chicago. The company's stock has risen. It now has approximately 70,000 customers

Monroe, La.-based Century Tel (NYSE: CTL) and its subsidiaries operated 2,464,564 telephone access lines, 648,800 long distance lines, 131,500 dialup Internet lines, and 47,900 DSL lines as of Decemer 31, 2002. The company focuses on serving rural, suburban, and small urban populations in 22 states.

It purchased Verizon's ILEC operations in Missouri on August 31, 2002 for $1.179 billion in cash, and Verizon's ILEC operations in Alabama on July 1, 2002 for $1.022 billion in cash. It sold "substantially all" of its wireless operations, mostly to ALLTEL, on August 1, 2002 for $1.59 billion in cash. The company has been installing a new billing system that is projected to have cost $180 million when complete. For accounting purposes, the company expects the billing system to last 20 years.

The company derived 9 percent of its revenues from Internet operations last year. On February 13, 2003, it completed the purchase of a fiber optic provider, Digital Teleport, Inc., for $38 million from bankruptcy court.

Reston, Va.-based Talk America Holdings, Inc., more familiarly known as Talk.com (NASDAQ: TALK), grew its customer base to 330,000 bundled long distance and local service customers as of Decemer 31, 2002. Although it focuses on the bundled service, the company also serves 460,000 customers who purchase long distance service only. The company leases all facilities from ILECs. Although Talk.com does have debt, most of it is not due until 2007 or later.

Santa Clara, Calif.-based Covad Communications Group (OTC BB: COVD) saw its stock fall to barely more than half its former value on concerns that it may not be able to provide any service at all three years from now, due to the FCC ruling on February 20, 2003. 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.

Nevertheless, the company added 23,000 lines and saw churn drop to 3.4 percent in the fourth quarter.

Anchorage, Alaska-based General Communications (CGI) (NASDAQ: GNCMA) competes with the ACS Group (below). General Communications is entering the yellow pages business in partnership with ALLTEL Publishing Corporation, so many population centers in Alaska will have two phone books by next year.

General Communications' largest customers are WorldCom and Sprint. The company serves 96,000 telephone access lines, 70,000 Internet subscribers, 36,200 cable broadband subscribers, 136,100 basic cable subscribers, 30,500 digital cable subscribers, 1,389 hotel rooms wired for video on demand, and 88,200 messaging subscribers, for a total of 460,139 subscribers. 1,700 additional subscribers are waiting for the ILEC install.

The company also provides video services to 1,050 rooms at the Kuparuk Oil Field living quarters facilities in Prudhoe Bay, Alaska. It provides comprehensive Internet service (including training and support) to 195 schools in Alaska. It provides TeleHealth services to 70 remote Alaskan communities. The company's ebill service supports 27,000 customers. It is starting an anti-spam service that it calls E-Mail Guard.

The company has a network design and implementation contract with the company that operates the trans Alaska oil pipeline that will involve 11 earth stations and fiber, wireless, and satellite facilities. The solution will monitor the pipeline and shut part or all of it down in an emergency.

General Communications is interested in entering the fixed wireless and PCS markets in 2004.

Anchorage, Alaska-based Alaska Communications Systems Group (The ACS Group) (NASDAQ: ALSK) is a diversified, facilities-based telecommunications provider in Alaska. Formed in 1998 ACS acquired Century Tel's Alaska ILEC properties in 1999. The ACS Group currently serves 323,000 access lines (less than before, but still 67 percent of all lines in Alaska), 82,000 cellular customers, 70,000 long distance customers, as well as 40,000 "Internet" subscribers (combined dialup and DSL) for a total of 521,000 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.

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 has not updated its numbers, so we have temporarily taken the company off our list.

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