EarthLink says customer loyalty, fiber broadband stemming consumer losses

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EarthLink is stemming the bleeding in its consumer business by offering fiber-based broadband services.

EarthLink may see the majority of its growth in business services, but the service provider is stemming the bleeding in its consumer business by offering a higher speed fiber-based service to consumers.

Louis Alterman, CFO of EarthLink, told investors during the recent Bank of America Merrill Lynch 2016 Leveraged Finance Conference that it has continued to see churn rates in its consumer business decline every quarter since 2007.

During the third quarter, EarthLink said consumer churn was 1.6%, for example.

“Our consumer business is a freakishly productive business,” Alterman said. “Back when we began to offer the consumer business for cash in 2007, churn was 5.9% per month and today is 1.6% and that will come down.”

Alterman added that customers who have been using EarthLink’s services for multiple years tend to stay with the company.

“Every single month of tenure that people add they get less likely to leave, and the reason is they love their e-mail address and the service we provide,” Alterman said. “If they already have broadband in their house or dial-up and it provides them their e-mail and news, they are not going to leave.”

RELATED: EarthLink says unique fiber routes will set its wholesale business apart

Through a mix of dial-up and reselling DSL and cable services, EarthLink provides nationwide internet access and related value-added services to 671,000 customers.

Besides reselling cable and DSL services from local telcos and cable operators, the service provider recently launched its HyperLink High Speed Internet service.

Available across its 21-state footprint, HyperLink is a fiber-based broadband service that offers speeds from 1.5 Mbps up to 45 Mbps. However, the speed availability varies by market.

The service provider noted that demand for the new HyperLink service continues to rise as it is offered in more markets.

“We've got a fiber offering now that has speeds of up to 45–50 Mbps and we have access nationwide to it,” Alterman said. “All of the sudden of our 20,000 calls a month we did, we have something compelling to sell and the business goes from a high single-digit decline to actually growing.”