EarthLink Adds 98,000 BB Users for 1.2 Million Total

EarthLink added 98,000 net subscribers during the first quarter and ended the quarter with approximately 5.3 million paying subscribers, an increase of 283,000 subscribers, or 5.6%, from a year ago. During the quarter, the company added 98,000 broadband subscribers, ending with approximately 1.2 million broadband customers, up 30.1% from a year ago. During the quarter, EarthLink also added 99,000 net new subscribers at PeoplePC Online, the company's value-priced narrowband service, while losing an approximately similar number of subscribers in its more mature premium narrowband service. The company ended the quarter with approximately 4.0 million total narrowband subscribers, equal to the number of total narrowband subscribers at the end of the first quarter of 2003.



Monthly subscriber churn was 4.5% in the quarter, up from 4.0% in the first quarter of the prior year. The higher churn rate is primarily due to the continued migration of premium narrowband subscribers to broadband access services, including those of competing providers, and the effect of early life churn associated with the higher level of gross subscriber additions in the last six months.



EarthLink's total revenues were $351.6 million in the quarter compared to $353.7 million from Q1 2003, reflecting a decrease of $6.7 million in equipment and related revenues and a decrease of $3.7 million in revenues associated with acquired prepaid PeoplePC subscribers, substantially offset by an increase of $8.3 million in service and advertising revenues.



Broadband revenues grew 26.0% over the prior year quarter to $102.5 million and represented 29.2% of EarthLink's total revenues. Narrowband revenues declined 10.4% from the prior year quarter to $227.1 million due to lower equipment revenues and acquired PeoplePC prepaid customer revenues described above and to the decline in premium narrowband subscribers, which was partially offset by the growth of the company's PeoplePC Online offering. http://www.earthlink.net