Subscriber Values: Q2 2007

by Alex Goldman ISP-Planet Managing Editor [September 14, 2007]

Subscriber numbers are from ISP-Planet's list of Top U.S. ISPs and from company reports (and are as of June 30, 2007). Market capitalization data is as of market close, September 7, 2007, as reported on The Wall Street Journal (sub. reqd.), except for Paetec, which is as reported on Forbes.

Our ISP rankings now contain only one pure, public ISP. United Online no longer considers itself an ISP. Time Warner is downplaying the importance of AOL.

Notes on EarthLink
EarthLink subscribers were 3,042,000 narrowband (and shrinking), 1,092,000 broadband (and growing), 106,000 webhosting accouts (shrinking slowly), and 101,000 business accounts consisting of 31,000 dialup and 70,000 business accounts. The company is failing to convert subscribers from dialup to broadband, but is growing its broadband subscribership through new accounts. The company has a new CEO who has promised to cut costs.

EarthLink suffered a severe setback in its subscriber count this quarter when it lost the contract to service the accounts of Sprint Nextel (now Embarq). The contract ended in April, 2007, and resulted in a loss of 753,000 broadband subscribers. ARPU, however, is rising.

EarthLink's struggles, included churn which is honestly detailed in the SEC report, illustrate how difficult it is to be a non-monopoly ISP today.

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

Notes on CLECs
Fairport, N.Y.-based Paetec reported serving 110,473 T-1 lines. Since it also delivers VoIP and also delivers high margin T-1 lines, its average revenue per customer (ARPU) is higher than many other CLECs on this list, justifying the price difference.

Santa Clara, Calif.-based Covad Communications Group no had 514,600 broadband lines (441,200 wholesale and 73,400 direct), 2,200 VoIP customers with 3,200 sites, and 3,600 fixed wireless broadband customers. The fixed wireless business gives the company an escape route if the FCC shuts the rest of its business down by ending line sharing.

Anchorage, Alaska-based General Communications (CGI) competes with the ACS Group (below). The company reported the following subscribers:

Anchorage, Alaska-based Alaska Communications Systems Group (The ACS Group). It served 191,767 access lines. It had 141,000 cellular customers, 64,684 "interexchange" customers, and 56,638 internet customers. Not counted are advertisers served through the company's directories. The company may be more like a rural ILEC than a CLEC.

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