Feeds

Broadband could cost AOL $1bn in revenue by 2005

Doh!

  • alert
  • submit to reddit

Providing a secure and efficient Helpdesk

AOL could lose $1bn in revenues by 2005 because of the growth of broadband in the US.

So say analysts at technology research and consulting outfit, Strategy Analytics, who reckon that AOL could be clobbered financially for the growth in broadband.

In its report Can AOL Bridge the Broadband Gap?Strategy argues that AOL will lose out financially as the dial-up market, which it dominates shrinks (as more and more people sign up to broadband).

Even if punters sign up to AOL's "Bring Your Own Access" scheme, which lets users who get broadband from cable or telephone companies sign up to AOL's content service for $14.95 a month, Strategy estimates that it would cost AOL almost $9 a month per punter in lost revenue.

The report speculates that the "combination of a shrinking dial-up market and the diminished margins produced by broadband subscriptions revenue could cost the company nearly a billion dollars by 2005."

James Penhune, of Strategy Analytics said: "Broadband subscribers account for only about a quarter of the US online audience today.

"But by 2005, we expect that half of all online homes will be using broadband connections, most of them provided by cable and telephone companies.

"AOL may be able to maintain a commanding share of the dial-up audience, but the overall size of this market will have declined significantly."

Last month AOL Time Warner announced that it lost $99bn in 2002. ®

Related Story

AOL TW posts record $99bn loss

Choosing a cloud hosting partner with confidence

More from The Register

next story
HBO shocks US pay TV world: We're down with OTT. Netflix says, 'Gee'
This affects every broadcaster, every cable guy
Same old iPad? NO. The new 'soft SIMs' are BIG NEWS
AppleSIM 'ware to allow quick switch of carriers
Arab States make play for greater government control of the internet
Nerds told to get lost in last-minute power grab bid at UN meeting
Brits: Google, can you scrape 60k pages from web, pleeease
Hey, c'mon Choc Factory, it's our 'right to be forgotten'
Of COURSE Stephen Elop's to blame for Nokia woes, says author
'Google did have some unique propositions for Nokia'
It's even GRIMMER up North after MEGA SKY BROADBAND OUTAGE
By 'eck! Eccles cake production thrown into jeopardy
prev story

Whitepapers

Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Win a year’s supply of chocolate
There is no techie angle to this competition so we're not going to pretend there is, but everyone loves chocolate so who cares.
Why cloud backup?
Combining the latest advancements in disk-based backup with secure, integrated, cloud technologies offer organizations fast and assured recovery of their critical enterprise data.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Saudi Petroleum chooses Tegile storage solution
A storage solution that addresses company growth and performance for business-critical applications of caseware archive and search along with other key operational systems.