Top U.S. ISPs by Subscriber:
Second Quarter 2002 Insights — continued

Broadband leaders

Overall, cable edged out DSL performance with the average provider growing its subscriber base by 12.5 percent. Overall, our top ranked cable providers connected nearly 1 million new subscribers between the end of the first and second quarters.

Road Runner continues to lead the cable crowd with 2.5 million subscribers, but the AOL property increased its overall subscriber base by a slim 4.2 percent, adding 100,000 new users in the second quarter. At this rate, AT&T Broadband could outpace Road Runner before the year is through. At least the broadband division of AT&T makes it a point to report its performance, unlike AT&T WorldNet.

AT&T Broadband added 400,000 new subscribers to its fold during the second quarter, attaining a 29.4 percent growth rate for the period—the best growth rate reported by any broadband service provider in the second quarter. Meanwhile, Comcast, Cox, and Charter added more than 100,000 new subscribers each during the second quarter growing their subscriber bases 12.3 percent, 11.5 percent, and 21 percent, respectively. Cablevision added about half this volume of new users (some 50,500 new subscribers) to post 9.5 percent subscriber growth over the first quarter.

Only RCN decreased its subscriber base by 1.5 percent, a total of about 7,000 subscribers. The company cited the downturn and its move to abandon certain assets that were underutilized elements of its network. We expect that RCN will turn around its performance in the third quarter and join the rest of the cable companies that are enjoying double-digit growth.

It should come as no surprise that the top DSL providers in the U.S. are also the country's largest regional bell operating companies (RBOCs). All together, these companies posted a growth rate of 10.3 percent over the first quarter of this year—good news for a bad telecom economy. SBC and Verizon are nearly in a dead heat, the southwest RBOC lighting up 200,000 new DSL lines and the east coast RBOC delivering 150,000 new connections during the same time frame—growing subscribers by 13.3 percent and 11.1 percent, respectively.

Not to be out paced by the larger RBOCs, Bell South added 74,000 new DSL subscribers in the second quarter, attaining 10.3 percent growth over the first quart of the year.

The beleaguered RBOC Qwest even managed to post moderate gains during the second quarter, adding some 24,000 new subscribers for about a 5 percent growth rate. Only those companies that resell DSL access seem to have suffered. Covad Communications decreased its subscriber base by 2,000 customers, reflecting a 0.5 percent loss of subscribers on the quarter. Covad said its customer churn rate of 4.2 percent would have been 3.7 percent, less financially strapped companies that could not pay their bills.

Counted here as a DSL provider, satellite service provider and DSL resellerHughes Direcway picked up 31,000 new subscribers in the second quarter, the equivalence of a growth rate of 13.8 percent.

Narrowband vs broadband
For the most part, the top U.S. dial-up providers lost nearly .5 million paying customers, while broadband service providers added 13.5 million subscribers in the second quarter of 2002.

Even so, dial-up access in the U.S. is far from dead. According to our calculations, top ranked DSL and cable services account for about 10 percent of the market, while our top dial-up ISPs account for 31 percent. This leaves the majority of the U.S. market to other ISPs—a category that remains as nimble and illusive as ever—with and estimated 59 percent share.

The fact remains that until we can secure consistent, timely and regionally accurate reporting of subscriber figures by all ISPs, we'll have to settle for asking publicly held ISPs to comply with our requests for information, so we can continue to provide rough estimates about the shape and form of the U.S. ISP market.

— End

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Related articles:

	[May 29, 2002]	Top U.S. ISPs by Subscriber: Q1 2002
	[Feb. 11, 2002]	Top U.S. ISPs by Subscriber: Analysis of 2001 Year End Reports
	[Nov. 2, 2001]	Top U.S. ISPs by Subscriber: Q3 2001—Market Analysis
	[Aug. 17, 2001]	Top U.S. ISPs by Subscriber: Q2 2001—Market Insights
	[May 10, 2001]	Top U.S. ISPs by Subscriber: New User Growth

Online Resources:

	Subscriber Value by Category
	Subscriber Ranking History