Sprint: Dial-up (Still) Brings Dollars

Sprint will continue providing wholesale dial-up Internet
access to United Online under a multi-year contract
extension announced Thursday.

The Overland Park, Kan., network operator and Westlake Village, Calif., ISP,
did not disclose specifics of the deal.

Sprint spokesman David Gunasegaram said there’s a misperception that DSL
and cable modems, which offer fast download and services such as Voice over
Internet Protocol , have killed the dial-up business. While, there is
certainly a shift occurring, the older technology will be around for years,
he said.

In fact, the new pact with United Online, which operates low-cost Internet
brands Juno, NetZero and BlueLight, covers more access lines than the
previous agreement, he said. United Online has more than 5.4 million
subscribers in more than 6,500 cities across the United States and Canada.

“It’s a pretty good business for us,” said Gunasegaram, who said Sprint
provide similar services for EarthLink and other ISPs.

Sprint competes with Level 3 Communications and others
for business with ISPs like America Online, EarthLink and United Online,
which still offer dial-up to subscribers.

In a show of further confidence in the market, Level 3 recently paid $35
million
for the wholesale dial-up access business of ICG Communications.

At the time, Level 3 CEO James Q. Crowe said dial-up is “undoubtedly
maturing,” but it “continues to generate very strong margins and cash flow
for our company.”

Sprint’s renewed deal with United Online is not exclusive. ISPs routinely
keep contracts with two or more Internet access providers so that if one
goes down the other can pick up the slack without interrupting service to
customers.

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