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Industry Spotlight: ISPs Struggle With Customer Growth

April 1999

Although the holidays brought strong fourth-quarter growth to several ISPs, new data from Inverse Network Technology show that consumers may not be merry. Eleven percent of calls to ISPs in February failed to connect, up from 8 percent in December.

The pileup was indeed holiday-related, says Chris Roeckl, marketing director at Inverse. Folks unwrapped their new PCs, got online and started clogging the wires. "What's interesting is that for the last two or three years, we have seen call-failure rates going down, and now we're not seeing that."

AOL, which attracted 1.6 million new users during the fourth quarter, has a consumer call-failure rate that's worse than the industry average, although Inverse won't release specific results on subpar performers. When AOL subscribers manage to get through, however, the service provides the fastest page downloads of any ISP measured.

Today 95 percent of Web surfing is still done through dial-up ISPs. But with cable modem and interactive TV providers stepping up marketing and deployment, the consumer market is the ISPs' to lose.

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