AOL will offer DSL this summer through agreements with Bell Atlantic, SWB, PacBell, Bell South, and presumably other companies as well. They will offer an inexpensive consumer service. Target price is $42. |
AOL with 17M subscribers is coming next. Will 2 million upgrade to DSL? If 10% convert, that would be 1.7 million new DSL subscribers, or as many as most analysts expect the rest of the industry to attract in the next 12 months. AOL's
spokeswoman Wendy Goldberg told DSL Prime that AOL is committed to advanced broadband technology, which they see as the natural upgrade for their subscribers. They have already announced agreements with BA
& SBC, while nearly every other provider has told DSL Prime they would like to work with AOL, and several are in active trials. AOL's announcement is expected in August, and the indicated price
will be $42, although that may change. (They speak of "about $20 more than their dial up price," which is $22. They are unlikely, at least at first, to offer the free computer they now make
available to dial-up customers.) Rhythms CEO Catherine Hapka told DSL Prime that AOL customers are interested in one thing "pricepriceprice," so that any provider hoping to work with AOL must be
ready to offer exceptional pricing. But she also pointed out that if AOL wants to upgrade a substantial fraction of their subscribers, they will choose to work with many different providers. That's required,
she believes, to install and service the number of customers AOL could generate. DSL Prime believes that AOL's alternative would be to move slowly on their DSL offering, but this would risk losing customers
to cable modem and other competition. Our guess is that August's rollout will be limited, but they will want to accelerate sales late this year or early next. That would require broad alliances with
providers. When capacity catches up, AOL will have to decide whether the best way to stimulate demand will be price cuts, incentives to sign on, or their traditional massive marketing. Is there room in the
landfills of America for many million more AOL CDs? |
Field reports may be edited for brevity or clarity, so are published anonymously. DSL Prime cannot verify most reports, so we advise you to take them
with a grain of salt. Companies are welcome to reply to any comments. We appreciate everyone who takes the trouble to send us a report. |