Recession could lengthen the twilight of dial-up
— -- With the costs of home-schooling a special-needs child, Arlene Dawes of Raleigh, N.C., says dial-up Internet is more attuned to her budget than broadband. Chuck Hester says the high-speed Internet options available in his rural neighborhood near Little Rock, are too pricey.
Lightning speed Internet is the wave of the future. But in a recession, good old dial-up service might get a longer look. Now Internet providers that have seen their dial-up customer base whittled over the past decade see an opportunity to stay in the game by offering the budget-conscious a cheaper option.
"Dial-up is declining overall, but that doesn't mean it's not still a viable business," said Kevin Brand, senior vice president of product management at EarthLink Inc. "There's still a big market out there and during these tough times, even customers who have bundles including broadband may be looking at their bill and thinking, 'Do I really need all this?"'
With that in mind, EarthLink recently rolled out a dial-up offer of $7.95 per month, lowering its cheapest service — and undercutting competitors — by $2.
The move to more aggressively court new dial-up users is striking, since it's a market many consumers have fled.
Only 9% of Americans were still using dial-up in a study last year by the Pew Internet & American Life Project. Time Warner Inc.'s AOL, once the king of dial-up with almost 27 million U.S. subscribers at its peak, decided long ago to prop itself up instead on advertising revenue. Now AOL, whose Internet subscribers are still mainly dial-up customers, counts 6.9 million of them.
United Online, which offers dial-up through its NetZero and Juno services for $9.95 a month, hasn't said whether it will match EarthLink's discount. But the company's ads signal the same approach to the recession.
"The economy is tough," Chief Executive Mark Goldston says in a recent TV commercial, claiming the 56 million American households with broadband could save $16 billion a year by switching to NetZero dial-up. "It comes down the need for speed or the need to save," he says.
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