AOL: Drop Dial-Up, Get Broadband

AOL said Tuesday that it would raise the price of its dial-up offering by $2 in an effort to encourage dial-up subscribers to sign up for broadband services provided by the company. Both its traditional service and its new broadband offering will now be priced at $25.90 USD per month.

The new pricing is set to take effect March 9. Not affected would be the company's 10-hour limited-use dialup and bring-your-own access plan, both priced at $14.95 USD monthly, and its annual prepaid plan, which retails for $239.40 with the option for a partial refund if the customer cancels early.

In recent weeks, AOL partnered with the four remaining Baby Bell companies -- BellSouth, Verizon, AT&T and Qwest -- to bundle their high-speed offerings with AOL service. It also joined forces with two cable operators: Time Warner Cable and Charter Communications. Each company will charge $25.90 USD per month, except for BellSouth, which will charge $29.90 USD.

According to AOL, these carriers can serve a majority of its current subscribers.

AOL sees these broadband deals as crucial to the future success of the company with more and more dial-up customers cycling off the service. The company has also made an effort to open more of its content to the general public, which it subsidizes through selling advertising.

The company has suffered from a loss of customers; it counted 19.5 million U.S. subscribers at the end of last year. This is down some 30 percent from its peak of 26.7 million subscribers in late 2002. AOL says three-quarters of its members are still on dial-up.