Earthlink 2008 Annual Report Download - page 35

Table of Contents
(a)
Year Ended December 31,
2006 2007 2008
Subscriber Activity
Subscribers at beginning of year
5,315,000
5,313,000
3,876,000
Gross organic subscriber additions
2,717,000
1,994,000
666,000
Acquired subscribers
162,000
65,000
8,000
Adjustment (b)
—
(
753,000
)
(15,000
)
Churn
(2,881,000
)
(2,743,000
)
(1,729,000
)
Subscribers at end of year
5,313,000
3,876,000
2,806,000
Churn rate (c)
4.6%
5.1%
4.4%
Consumer Services Data
Average subscribers (d)
5,124,000
4,321,000
3,130,000
ARPU (e)
$
18.52
$
19.77
$
20.76
Churn rate (c)
4.6%
5.2%
4.4%
Business Services Data
Average subscribers (d)
212,000
207,000
179,000
ARPU (e)
$
63.61
$
76.62
$
81.64
Churn rate (c)
2.8%
2.6%
2.8%
Subscriber counts do not include nonpaying customers. Customers receiving service under promotional programs that include periods of
free service at inception are not included in subscriber counts until they become paying customers.
(b) We had a marketing relationship with Embarq, a spin-
off of Sprint Nextel Corporation's local communications business, under which
EarthLink was the wholesale high-
speed ISP for Embarq's local residential and small business customers. In April 2007, our wholesale
contract with Embarq expired. As a result, we removed 753,000 wholesale broadband EarthLink-
supported Embarq subscribers from our
broadband subscriber count and total subscriber count. During the year ended December 31, 2008, we removed 15,000 additional
EarthLink-supported Sprint customers from our broadband subscriber counts.
(c)
Churn rate is used to measure the rate at which subscribers discontinue service on a voluntary or involuntary basis. Churn rate is
computed by dividing the average monthly number of subscribers that discontinued service during the year by the average subscribers for
the year. Churn rate for the years ended December 31, 2007 and 2008 excludes the impact of the Embarq adjustments.
(d)
Average subscribers or accounts is calculated by averaging the ending monthly subscribers or accounts for the thirteen months preceding
and including the end of the year.
(e)
ARPU represents the average monthly revenue per user (subscriber). ARPU is computed by dividing average monthly revenue for the
year by the average number of subscribers for the year. Average monthly revenue used to calculate ARPU includes recurring service
revenue as well as nonrecurring revenues associated with equipment and other one-
time charges associated with initiating or
discontinuing services.
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