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2.1 Million Americans Still Connected To AOL, Inc. (NYSE:AOL)’s Dial-up Connection With ARPU of $20.8

AOL, Inc. (NYSE:AOL) reveals that at least 2.1 million Americans are still tied to its dial-up Internet service. The company made the revelation at the release of its 1Q2015 earnings. Cost benefits are driving more Americans to broadband Internet, making AOL’s 2.1 million dial-up subscriber base a stunning development.

AOL’s dial-up Internet offers speeds of 56kbps and costs $20 a month. At that speed, it would take more than five minutes to load a Web page. AOL revealed that the average revenue per user (ARPU) from its under its dial-up subscribers is $20.83.

Gradual decline

Although AOL, Inc. (NYSE:AOL) still boasts a whopping 2.1 million subscribers under its dial-up service, the numbers are declining, albeit gradually. The company disclosed having 2.4 million dial-up users in 1Q2014 and the number stood at 2.2 million in 4Q2014.

Most Americans have shifted away from dial-up Internet to broadband, according to the latest surveys. At least 70% of Americans currently have broadband connects in their homes while more than 80% have access to broadband connections that give speeds of 25Mbps or higher.

U.S. ranks lower in broadband speeds

Although many Americans are increasingly shifting to broadband connection, the average U.S. Internet speeds are lower than in many countries in the world. According to Akamai, the average broadband speed of 11.1Mbps in the U.S. as of 4Q2014 placed the country at No. 16 in global Internet speed rankings.

Reasons for large dial-up numbers

The reasons so many Americas are still stuck with dial-up Internet are varied. Some people say that they will wait until broadband services come to where they live before they can make a switch. Others say that they are stuck with dial-up because they are simply not interested in switching to broadband. However, 62% of current dial-up users say that lower prices in the broadband offering would make them shift in the long run.

1Q highlight

On the 1Q earnings results, AOL, Inc. (NYSE:AOL) posted adjusted EPS of $0.34 on revenue of $625.1 million. Both EPS and revenue beat Wall Street expectations as analysts were expecting EPS of $0.32 on revenue of $594.6 million for the quarter.

Published by Steve Hackney

Steve Hackney is a corporate finance professional with over 14 years of experience in cash management and investing. He earned a Bachelor of Science in Finance from Florida State University and holds a Certified Treasury Professional certification. Steve lives in Orlando, Florida with his family.

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