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Technology Stocks : America On-Line: will it survive ...?
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To: Thom Taylor who wrote (1534)2/7/1997 12:24:00 AM
From: (Bob) Zumbrunnen   of 13594
 
I read and article today that said when AOl has all the up graded
modems in, if all the subscribers got on line at once, they could only handle 5% of them.

Is this article available on-line anywhere?

Currently, if everyone logged on, they could only handle 3% of them (31:1 user/modem ratio). If memory serves, I also came up with something like 5% (20:1 ratio) when they're done.

Hopefully the article was at least fair by disclosing that the commonly accepted ratio is 10:1, allowing only 10% of the users on at one time. This ratio has been proven industry-wide.

If AOL sticks with current plans, they're still going to have to do some more upgrading this summer. Of course, they'll say it's because demand is still increasing. They won't admit it's because 400k modems isn't enough.

However, a point I've raised before is that I think it's realistic to expect they will be down to 4 million direct-access users by then. They'll never tell us that, though. We'll have to rely on someone analyzing subscription increases and questionnaire answers at the other biggies to try to estimate how many users have fled.

The 10:1 ratio has a way of enforcing itself, whether the ISP likes it or not. If the ratio is too high, enough users leave to bring the ratio back down.
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