February 2006
AOL has announced that it would raise the price of its AOL Dialup offering by $2
in an effort to encourage dial-up subscribers to sign up for broadband services
provided by the company. Both its traditional service and its new broadband
offering will now be priced at $25.90 USD per month.
Broadband access has yet to reach the low-low price of good old fashioned dialup
internet access. While some DSL companies have toyed with dirt-cheap rates (some
as low as $10.95/mo.), most dial-up users remain committed to their modems while
DSL companies try to find a way to lure customers away from them.
AOL’s Novel Approach
Rather than try to roll out cheaper DSL service, AOL has announced they're going
to raise their dial-up rates. Most of 20 million AOL dialup users are going to
see their rates increase by $2 per month, as the company prepares to charge the
same amount for AOL dialup service as they do for DSL. The company hopes that
when users see that AOL's dialup and re-branded DSL products are both $25.90,
customers will move to the latter. However, what’s more likely is you’ll hear a
great big sucking sound as millions of subscribers move to AOL competitors.
Starting at $5.47/mo. PeoplePC is happy to get their business. And, as a
nationwide service provider with thousands of service lines they’re more than
capable of handling the exodus.
"We're doing this because a majority of AOL members will be able to get high-speed
connections and access the AOL service for this new price," spokeswoman Anne
Bentley said Tuesday. "Hopefully it's an encouragement for them to get high-speed
connections."
Is this some kind of joke? With AOL offering many of their services, including
email, for free why would they stay?
Why indeed? AOL has suffered from a loss of customers; it counted 19.5 million
U.S. subscribers at the end of last year. This is down some 30 percent from its
peak of 26.7 million subscribers in late 2002.
Wal-Mart Partners To Sell AOL Dialup for $9.94
Now, on top of raising prices to long-term customers, AOL is marketing to new
customers through Wal-Mart for $9.94. Have they no shame? It'll be interesting
to see how AOL rationalizes this with their users who are paying $23.95 a month
for years.
It’s time to move to a new ISP – one that cares about your business!
