Earthlink 2006 Annual Report Download - page 5

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and to value-priced access services. As a result, our premium narrowband subscriber base and revenues have been decreasing, and we expect
this trend to continue during 2007. We will continue to seek to identify opportunities to add new subscribers through product innovation and
effective sales and marketing. We also seek to reduce churn and “up-sell” customers to our high-speed Internet, voice, wireless or value-added
services.
Improving or maintaining operating margins. We are focused on delivering our core services more cost effectively by capitalizing on
the continuing decline in telecommunications costs, leveraging the benefits of scale throughout our business, reducing and more efficiently
handling the number of calls to contact centers, managing cost effective outsourcing opportunities and streamlining our internal processes and
operations. We leverage our national footprint by continuing to migrate customers to lower cost telecommunications networks, utilizing
volume discounts and managing our network to increase its efficiency. We are also focused on improving our marketing effectiveness and
utilizing cost effective distribution channels. We plan to continue to manage operating expenses, and to leverage our infrastructure as we seek
to expand our service offerings.
Continuing to grow our value-priced narrowband access service. The market for value priced narrowband access services has grown
over the past several years by attracting households new to the Internet or current Internet users interested in reducing their cost of Internet
access. We provide value-priced Internet access services through our PeoplePC Online offering. We anticipate the market for value-priced
narrowband access will continue to grow, and we expect to continue to devote sales and marketing resources to market the PeoplePC Online
offering to increase our value priced narrowband customer base.
Pursuing new partnerships and relationships with wholesale broadband providers. Broadband, or high-
speed, access is growing and the
estimated number of households with broadband access surpassed the number of households with dial-
up connections during 2006. We provide
wireline high-speed Internet access services in markets throughout the U.S. and have established a national broadband footprint via multiple
wholesale vendors, enabling us to offer digital subscriber line (“DSL”), cable and/or satellite broadband services in multiple markets
throughout the U.S. We will continue our efforts to expand our broadband footprint by pursuing new partnerships and relationships with
wholesale broadband providers.
Continue to expand our presence in growth markets
We will continue to introduce new products and services to enhance our competitive position with the objective of generating additional
revenues and profits. The communications market is characterized by intense competition and changing industry and regulatory standards. In
order to be successful, we must adapt to this ever changing market to deliver compelling, competitive and useful services to consumers and
businesses. Since the inception of our business, we have expanded from a traditional dial-up service provider to a total communications
provider. We are currently focused on growing our IP-based voice services, municipal wireless broadband services and services for business
customers.
IP-based voice. In late 2005 and 2006, we launched Earthlink DSL and Home Phone Service, a new DSL and VoIP service, which uses
Covad Communications Group Inc. (“Covad”) line-powered voice access that allows us to offer consumers low-cost phone services along with
high-speed Internet access. The service is now available in 12 markets covering approximately 10.0 million households.
We are actively marketing EarthLink DSL and Home Phone Service and will expand our marketing efforts to promote these services
during 2007. We will also continue to invest in the development of additional applications and services for our IP-based voice services.
Municipal wireless broadband. We are investing in wireless broadband access to deploy a competitive alternative to DSL and cable for
delivering broadband Internet access services. We began this initiative during 2005 by winning proposals to build, own and operate wireless
broadband networks for the cities of
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