Earthlink 2008 Annual Report Download - page 38

Table of Contents
Revenues
The following table presents revenues by groups of similar services and by segment for the years ended December 31, 2006, 2007 and
2008:
Consolidated revenues
The primary component of our revenues is access and service revenues, which consist of narrowband access services (including traditional,
fully-featured narrowband access and value-priced narrowband access); broadband access services (including high-
speed access via DSL and
cable; VoIP; and managed private IP-based wide area networks); and web hosting services. We also earn revenues from value-
added services,
which include search, advertising and ancillary services sold as add-
on features to our access services. Total revenues were $1.3 billion,
$1.2 billion and $1.0 billion during the years ended December 31, 2006, 2007 and 2008, respectively. The decreases over the past three years
were primarily due to decreases in consumer services revenues resulting from decreases in average consumer subscribers, which were
approximately 5.1 million, 4.3 million and 3.1 million during the years ended December 31, 2006, 2007 and 2008, respectively. These decreases
were driven primarily by narrowband subscribers. Also contributing to the decrease during the year ended December 31, 2007 was the removal
of 753,000 Embarq subscribers. Offsetting the decrease during the year ended December 31, 2007 was an increase in business services revenue,
primarily due to our acquisition of New Edge in April 2006. Business services revenue decreased during the year ended December 31, 2008 due
to a decrease in average business subscribers.
Consumer services revenues
Access and service.
Consumer access and service revenues consist of narrowband access, broadband access and VoIP services. These
revenues are derived from monthly fees charged to customers for dial-up Internet access; monthly fees charged for high-
speed access services
including DSL and cable; monthly fees charged for VoIP services; usage fees; activation fees; termination fees; and fees for equipment.
Consumer access and service revenues decreased $124.2 million, or 12%, from the year ended December 31, 2006 to the year ended
December 31, 2007. The decrease in consumer access and service revenues was primarily due to decreases in narrowband access and broadband
access revenues, offset by an increase in VoIP revenues. Narrowband access and service revenues decreased due to maturation and competition
in the market for narrowband Internet access, which resulted in average consumer narrowband subscribers decreasing from 3.4 million during
the year ended December 31, 2006 to 3.0 million during the year ended December 31, 2007. Also contributing to the decrease in narrowband
access and service revenues
34
Year Ended December 31,
2007 vs. 2006
2008 vs. 2007
2006
2007
2008
$ Change
% Change
$ Change
% Change
(dollars in thousands)
Consumer Services
Access and service
$
1,021,620
$
897,423
$
682,135
$
(124,197
)
-
12%
$
(215,288
)
-
24%
Value
-
added services
117,634
127,985
97,741
10,351
9%
(30,244
)
-
24%
Total revenues
$
1,139,254
$
1,025,408
$
779,876
$
(113,846
)
-
10%
$
(245,532
)
-
24%
Business Services
Access and service
$
158,409
$
187,709
$
172,944
$
29,300
18%
$
(14,765
)
-
8%
Value
-
added services
3,409
2,877
2,757
(532
)
-
16%
(120
)
-
4%
Total revenues
$
161,818
$
190,586
$
175,701
$
28,768
18%
$
(14,885
)
-
8%
Consolidated
Access and service
$
1,180,029
$
1,085,132
$
855,079
$
(94,897
)
-
8%
$
(230,053
)
-
21%
Value
-
added services
121,043
130,862
100,498
9,819
8%
(30,364
)
-
23%
Total revenues
$
1,301,072
$
1,215,994
$
955,577
$
(85,078
)
-
7%
$
(260,417
)
-
21%