RealTime IT News

Can EarthLink Leapfrog 3G Rivals?

For years, EarthLink has battled America Online, United Online and other dial-up and broadband ISPs for subscribers.

But a new third-generation wireless joint venture adds Verizon Wireless, Cingular and Sprint to the Atlanta ISP's list of competitors.

With partner SK Telecom , EarthLink wants to bring advanced mobile services -- such as video conferencing, television and gaming -- to users in the United States beginning this summer.

The companies are aiming for $2 billion in revenue and 3 million subscribers by 2009. These are relatively modest goals in terms of the overall wireless market, but could prove challenging for a new entrant.

"They can't just do video music or games," Joe Laszlo, a JupiterResearch analyst, said. "They have to do it better than Verizon, Sprint or Cingular."

Working in EarthLink's favor is SK's experience. South Korea's largest wireless carrier has been first to implement every new Code-Division Multiple Access application during the last decade, including new location-based services and video conferencing.

In addition, SK Telecom has experience and success in mobile marketing, which helped it reach an average revenue of $40 per user last year -- the highest of any provider when the gross domestic product of the country is considered.

EarthLink's gamble would help it diversify and make more of its other offerings. SK-EarthLink could help satisfy American consumers' appetite for bundled services, said Laszlo of JupiterResearch, which is owned by the same parent as this site.

There are also unanswered questions about gaining CDMA network access, Laszlo said.

EarthLink posted higher profits for the fourth quarter, but saw revenue slip. It's also facing increasing pressure from Verizon and Comcast on the broadband side.

EarthLink added 84,000 net broadband subscribers and 118,000 net value PeoplePC Online subscribers during the three-month period. But its net premium dial-up subscriber base shrunk by 211,000 and Web hosting accounts declined by 5,000, the company said.

Overall, EarthLink's customer base declined 14,000 during the fourth quarter.