Subscriber Values: August 2003

ISP-Planet Staff [August 28, 2003]

Subscriber numbers are from ISP-Planet's list of Top U.S. ISPs and from company reports (and are generally as of June 30, 2003). Market capitalization data is as of market close, Tueday August 26, 2003, as reported on the Wall Street Research Network.

All ISPs except AOL recorded dramatic stock gains, with EarthLink and United Online passing the psychologically significant $1 billion in market capitalization. Congratulations to them!

Further notes on ISP data

Go America's stock fell and the company's subscribership also fell as the company continued to cut costs.

Motient (OTCBB: MNCPE) has been removed from our list temporarily. The company told the SEC on August 14, 2003, that it had recently changed auditors and would be unable to file a timely quarterly statement.

RCN is cutting costs and selling assets. Its stock doubled.

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

DSL.net (NASDAQ: DSLN) 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 (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.

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 for small ISPs listed below are probably a better guide, showing prices of $45 to $156 during 2001.

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.

On December 31, 2002, New Haven, Conn.-based DSL.net (NASDAQ:DSLN) served approximately 22,100 installed broadband subscriber lines. It has not released subscriber numbers since.

Other notes
At this point in time, ISPs and CLECs have filed financial disclosures concerning their subscriber numbers as of June 30, 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.

Further notes

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