EarthLink’s broadband numbers climb as dial-up falters

EarthLink is starting to bleed narrowband subscribers as more dial-up customers switch over to cable modems and DSL. Luckily for EarthLink, it’s managed to sign many of those defectors up to its own broadband service.

The ISP today reported adding 102,000 broadband subscribers for a total of 993,000 in the second quarter, but its dial-up group shed 80,000 subscribers in the quarter, bringing its narrowband subscriber base down to 3.88 million. The dial-up subscriber loss cost EarthLink $15 million in revenues compared to last year’s second quarter, but the additional broadband subscribers more than made up for the lost. EarthLink’s broadband revenues rose 53% in one year to $88.5 million.

Overall revenues were up 5% to $353.3 million compared to last year’s first quarter, and EarthLink reported a narrower loss of $14.5 million, down from the $34.9 million the ISP reported last June.

“While we’re disappointed by our premium dial-up subscriber losses, we were overall pleased with the quarter,” CEO Gary Betty said during today’s earnings call. “We’re well positioned for the future.

That future will be drawn heavily from broadband services, which now account for 25 percent of EarthLink’s revenues, up from 17% a year ago. And EarthLink officials said the ISP expects to add to that percentage considerably while trying to hold the line on its dial-up customer base. Betty said EarthLink has begun renegotiating many of its carrier contracts to get lower wholesale lease rates for cable and DSL lines and it plans to discontinue many of its co-branding operations--such as its service partnership with Charter--and push its own exclusive service. By the end of the year EarthLink project it will add 230,000 to 280,000 broadband subscribers and expects 2004 revenues at about $1.4 billion.