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Technology Stocks : America On-Line (AOL) -- Ignore unavailable to you. Want to Upgrade?

To: stock_bull69 who wrote (6438)	3/11/1999 5:34:00 PM
From: Jenne	Respond to of 41369

AMERICA ONLINE (AOL) 95 7/16 +2 5/8 SBC COMMUNICATIONS 53 5/16 +1 5/8 In the ongoing battle for broadband, the xDSL camp fires another round today, as America Online signs agreement with local telco company SBC to provide broadband access to AOL users. SBC currently has xDSL service available to 2 million homes. On the cable modem side of the broadband wars, this is equivalent to the "homes passed" number they quote. It means that if all 2 million decided to sign up today, they have the equipment in place to deliver the service. SBC expects to have the broadband service available in seven states reaching 8.4 million homes by the end of 1999. It wasn't clear from the release, and we were unable to find out from the company by the time of this posting, whether that number assumes the successful acquisition of baby Bell Ameritech, (AIT), which SBC is in the process of acquiring for $61 billion. Today's agreement with AOL will allow AOL users to get broadband access for just $20 a month additional, making AOL broadband only slightly more expensive than current @Home (ATHM) offerings. While @Home has been crowing about the growth rate of their cable modem broadband solution, it seems as if xDSL offerings are proliferating at a surprising rate. Also, SBC stated that no marketing effort had yet begun for their xDSL service. Could be they will let AOL handle the promotional side. Either way, since AOL keeps choosing xDSL partners for broadband, it appears that AOL views @Home as a serious threat. The AOL vote for xDSL is likely to be the key driver that keeps xDSL alive. If left to the telephone companies, xDSL would probably go the way of ISDN. But with AOL's universal presence, and the ability of phone companies to add xDSL services over existing phone lines, xDSL will certainly gain momentum this year. The broadband war between xDSL and cable modems may become the theme of the coming year, but we predict it ultimately winds up a draw, with well established user bases of both technologies.