AOL 'mulling free broadband services'

NEW YORK - Time Warner Inc.'s AOL unit is considering offering its services, except for internet access, free of charge to anyone with a high-speed connection, a source familiar with the plans has said.

The idea is one of several options AOL, once the biggest online services company, is considering to boost online advertising sales. It currently relies mainly on subscription revenue, but has been losing subscribers at a quickening pace to rivals including cable operators and telephone companies.

Many current subscribers have clung to AOL to keep their email addresses, but many former subscribers have left in recent years for free email services offered by Yahoo Inc. and Google Inc..

By giving away the service for free and letting people keep their email, AOL might retain the internet traffic -and ad revenues - it would have lost to competitors.

Subscribers who want AOL's dial-up internet access would still have to pay, the source said. AOL declined comment.

AOL wants to rely more heavily on online advertising and less on subscription revenue, which currently accounts for about 80 per cent of total revenue, the source said, adding that no decision has been made.

Under the plan, AOL would stop charging subscription fees for services ranging from email to anti-virus protection for users with high-speed internet access or a dial-up service from another provider, the source said.

AOL currently offers its services for free to Time Warner Cable's high-speed internet subscribers, but the service is not heavily advertised.

Giving away AOL for free to all high-speed internet subscribers could reduce revenue by about US$2 billion ($3.35 billion), according to a report in the Wall Street Journal.

But the move could help it generate more traffic to its websites and thereby boost online advertising, which is priced

- REUTERS