RealTime IT News

IBS Interactive Sheds Dial-Up Business

EarthLink Inc. Tuesday agreed to purchase the dial-up clientele of New Jersey-based IBS Interactive Inc.

IBS Interactive will receive cash for each of its 17,000 subscribers that land with EarthLink dial-up services. IBS Interactive provides regional dial-up services to East Coast clients in Virginia, North Carolina, South Carolina, New Jersey, New York and Pennsylvania.

According to ISP-Planet, recent subscriber acquisitions are averaging about $428 per customer. If the IBS Interactive deal with EarthLink is consistent with market trends, the firm could stand to make more than $7 million at the close of the deal.

The modem-based divestment is due to IBS Interactive's desire to pay off bank debt assumed in its March acquisition of Digital Fusion Inc. While financial details of the deal were not disclosed, IBS Interactive indicated that it has 60-days, or two billing cycles to make the most of its subscriber transfer to EarthLink.

Nick Loglisci, IBS Interactive chief executive officer, said that divesting its consumer dial-up business is the last piece of its strategic plan commenced late last year.

"We're going to concentrate entirely on IBS Interactive's higher-margin, consultative e-business services," Loglisci said. "We have taken this step in anticipation of the pending merger with Infonautics."

Cliff Bryant, EarthLink subscriber acquisitions manager, said its naturally pleased to add IBS Interactive's clients to its fold.

"We have a long history of integrating subscriber bases with a minimum of hassles for the customer and we look forward to exceeding these new EarthLink members' expectations," Bryant said.

EarthLink's recent acquisition history includes 762,000 potential customers from OneMain.com in a June cash and stock valued at approximately $308 million, or roughly $404 per subscriber.

EarthLink picked up MindSpring's client base in Sept. 1999 when the two national Internet service providers merged business operations.

Focusing on basic dial-up transport, EarthLink remains loyal to its connectivity service core rooted in MindSpring's renowned customer satisfaction and client retention mantra.

IBS Interactive's Loglisci said EarthLink has continued to deliver consumer-centric dial-up services that command the respect and envy of the industry.

"Our dial-up customers have been very loyal to us and we believe that EarthLink, which has built its reputation on providing exceptional customer service and support, will quickly gain the same loyalty," Loglisci said.

"We will continue to work closely with EarthLink to ensure the transition goes as smoothly as possible, without any interruptions and a minimum of changes for our subscribers," Loglisci added.

IBS Interactive plans to maintain its leased and digital subscriber line services to clients in order to focus on growing its e-business and information technology solution offerings.