Paying Subscribers Flock to Switch to Free AOL

07 August 2006

NEW YORK: Following last weeks' announcement of free internet access and email, AOL's paying subscribers are scrambling to switch to the zero-cost service, according to Spencer Wang and Shubhashree Mukherjee, two astute analysts at Bear Sterns.

Both called AOL to cancel their respective $14.95 monthly subscriptions and switch to the freebie - but had to wait an unusually long eighteen minutes (normally 5-10 minutes) before connecting with live agents.

One agent told them that "every second call we are receiving today is for free AOL." She also confided that she services an average of 70-80 calls daily.

From which the cute duo deduce that if AOL customers continue to switch at the current rate, it will take less than a month for its 6 million existing broadband subscribers to convert to the free service.

They also cutely note that it is now critical for AOL to accelerate ad-revenue growth and cost cutting progress.