RealTime IT News

Slight Summer Slump for Excite@Home Subscribers

Excite@Home Corp. continues to lure cable modem subscribers to its brand of high-speed services, but blamed hardware shortages for losing steam in its quarterly review of new subscriber growth.

In the second quarter of this year Excite@Home's residential broadband subscriber base grew to more than 1.8 million clients, which reported serving more than 1.5 million subscribers at the end of the first quarter.

While Excite@Home's subscriber additions in the second quarter totaled more than 300,000, new subscribers, its growth rate declined approximately 10 percent from the first quarter of 2000. Excite@Home said that the slowdown was the result of a temporary interruption in the supply of cable modems available to several of its cable partners.

Canadian cable company Shaw Communications Inc. experience the same type of new subscriber slowdown in May. The firm attributed its decrease in new subscriber growth to a general shortage of cable modems supplied by Motorola Inc.

Motorola and other manufacturers are spending billions of dollars to boost modem and chip production capacity to meet the demand for cable modems. Analysts predict that the supply setback is merely a distribution hiccup.

George Bell, Excite@Home chairman and chief executive officer, said second quarter results continued to build upon its three key objectives for the year.

"First, we accelerated our broadband network deployment to stay ahead of the incredible demand for our broadband service, making significant progress on increasing the reach and capacity of our network," Bell said. "We added six million homes to our serviceable footprint this quarter, and with the temporary shortage of cable modems behind us we are well prepared to add subscribers at unprecedented rates."

Earlier this week Amsterdam-based United Pan-Europe Communications NV teamed up with Excite@Home to form one of the largest broadband companies outside of the U.S.

The merger combines UPC's Chello Broadband NV subsidiary with Excite@Home's international operations in Europe, Latin America, Australia and Japan. Dubbed Excite Chello, the combination of the companies makes Excite Chello the operator of the largest cable footprint outside North America.

Bell said the merger with Chello was part of its second goal, which is designed to accelerate its international growth.

"Second, we greatly accelerated our international strategy," Bell said. "Our new joint venture with Excite Chello establishes the largest broadband footprint outside of North America and plans to double the number of Excite portals available around the world."

Bell said the consolidating its portals into a single platform further streamlined its operations.

"Lastly, we moved to consolidate our content efforts onto a single platform by launching @Home 2000, the Excite broadband portal and a re-design of our Excite narrowband portal," Bell said. "The unique aspects of the service represent a huge opportunity for Excite@Home to drive subscription and media revenue growth."

Excite@Home's broadband footprint grew to more than 32 million upgraded cable homes passed, up 26 million homes passed at the end of March. Penetration in Excite@Home's North American markets reached 6.2 percent, nearly doubling market penetration of 3.6 percent posted a year ago.

Excite@Home Business Solutions, the company's commercial services division, provides @Work-branded high-speed access to businesses. The commerce division reported it supplied 7,600 business clients with high-speed Internet services as of June 30, 2000.

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