Subscriber Values: October 2002

ISP-Planet Staff [October 31, 2002]

The national Internet service providers whose values we track stayed mostly level. EarthLink (Nasdaq: ELNK), for example, saw its subscribership decline but remained mostly unchanged. Sprint announced that it would sell some EarthLink stock.

Executives at United Online (Nasdaq: UNTD) announced a plan to sell some stock, after which the stock rose.

The stock of AOL (NYSE: AOL) rose, perhaps because investors believe that AOL has no more hidden flaws in its balance sheet.

Subscriber numbers are from ISP-Planet's list of Top U.S. ISPs and from company reports. We do not count webhosting customers in our subscriber numbers. Market capitalization data is as of market close, Tuesday, October 29, 2002, 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.

Go America's (Nasdaq: GOAM) stock rose very sharply. Analysts seemed to believe that the rise was due to a relationship with EarthLink announced on September 26, 2002.

As it has exited bankruptcy and reported subscriber numbers, we added Motient (OTCBB: MNCPE) back to the list of mobile wireless ISPs. In addition to its 90,082 wireless Internet subscribers, the company has 35,445 field services subscribers, 91,803 transportation customers, 29,826 telemetry customers, and 543 in a category labeled "maritime and other."

RCN (Nasdaq: RCNC) is selling its only cable franchise, but was criticized for plans to use the proceeds to expand instead of pay down debt. Standard & Poor's said, "Proceeds from the sale will mainly be used to expand RCN's cable overbuild business. Therefore, the transaction does not address Standard & Poor's ongoing concerns about RCN's substantial leverage, prospect of weakening liquidity, and business risks due to competition from digital subscriber line and incumbent cable modem service providers."

Monroe, La.-based Century Tel (NYSE: CTL) and its subsidiaries operated 2.4 million telephone access lines and had 584,400 long distance customers as of September 30, 2002. DSL appears to be insignificant for the company, but is growing.

Little Rock, Ark.-based Alltel Corp. (NYSE: AT) provides communications and information services, as well as telecom products and telephone directories. The company claims 12 million subscribers.

Reston, Va.-based Talk America Holdings, Inc., more familiarly known as Talk.com (Nasdaq: TALK), serves 244,000 retail phone subscribers, both residential and small business. The company leases all facilities from ILECs. Although Talk.com does have debt, most of it is not due until 2007 or later.

General Communications (CGI) counts WorldCom as its largest customer and shareholder, but its stock rose after the company wrote off most of its WorldCom receivables. All told, GCI (Nasdaq: GNCMA) serves 71,200 dialup, 33,000 cable Internet, 134,581 cable TV, and 28,500 digital TV subscribers as of September 30, 2002, as well as 95,800 access lines as of June 30, 2002, for a total of 363,081 subscribers.

Covad Communications Group (OTC BB: COVD) is cutting costs and now serves about 357,000 subscribers, down 2,000 from the previous quarter. Covad stock has been flat with little news, but a steady, slow-moving business is good news for Covad.

Alaska Communications Systems Group (The ACS Group) is diversified, facilities-based telecommunications provider in Alaska. The stock continues to fall on concerns about the company's debt load. The ACS Group (Nasdaq: ALSK) currently operates 327,161 access lines, connects 81,550 cellular and 67,230 long distance customers, as well as 35,614 dialup subscribers and 11,045 DSL subscribers.

At last count Charlotte, North Carolina-based US LEC (Nasdaq:CLEC) provided services to 7,500 enterprise customers comprising 208,188 voice and 40,147 data channels, as well as 30,131 ISP clients. US LEC did not disclose subscriber numbers in detail this month and is temporarily 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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