Yahoo! (NASDAQ:YHOO) and the country's second-largest local phone giant, SBC Communications (NYSE:SBC), today announced upgrades to their digital subscriber line (DSL) and dial-up Internet access services.
While AOL Time Warner's (NYSE:AOL) AOL online division and Microsoft's (NASDAQ:MSFT) MSN have been shedding dial-up subscribers quarterly (840,000 made an exodus from AOL last quarter), phone companies that offer DSL have been gaining customers. Yahoo! smartly began discussions to offer DSL (and dial-up) with partner SBC in November 2001, launching the service in September 2002.
Less than a year later, they have 3 million subscribers, with 300,000 signing on just last quarter and a majority arriving through the Yahoo! network. Additionally, lucrative small-business subscribers account for 500,000 of the 3 million clients, prompting new tools aimed at them called SBC Yahoo! DSL Business Edition. (It allows for Web pages, marketing, and customer mailing capabilities, among other business features.)
For consumer surfers, the DSL and dial-up service upgrades mirror many just made by AOL and MSN and offer a few novel ones. Upgrades include new drag and drop features (drag and drop files, pictures, folders, etc., from the Web to your e-mail, IM, etc.); shared browsing (with a new browser) that allows subscribers to remotely browse the same Web pages together in real time; better e-mail and ad-blocking features; and computer-wide antivirus software.
The basic DSL service costs $29.95 a month for a 12-month contract. (It's unclear where the price goes after that -- the companies say it reverts to the "then current and applicable price" -- so, back to $49.95 a month, guys?) Bundling with SBC phone services could lower prices another 30% or so.
If the $29 price lasts, it would not be much higher than AOL's dial-up monthly charge. So far, however, it appears it can't. How many dial-up users are on the sidelines waiting for permanently lower high-speed prices? Tens of millions.
