SBC Communications saw second-quarter revenues and profits slip because of stiff competition but reported strong gains digital subscriber line (define) service sign-ups.
The San Antonio-based telecom posted a 42 cents per share profit on revenues of $10.2 billion, compared to 53 cents per share on $10.8 billion during the same period last year. The figures exclude Cingular Wireless, a joint venture between SBC and BellSouth.
In addition to competition, increased costs related to pension and postretirement benefits, and by accounting changes implemented at the beginning of this year, also cut into profits.
Company executives were pleased with the growth in broadband customers. In its 13 state-area (mostly in the West and Midwest), SBC added 304,000 DSL customers, bringing its total to 2.8 million.
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SBC said the jump is a 60 percent jump from the same period last year and the most DSL quarterly net adds ever reported by a Baby Bell.
Service providers, both DSL and cable, are aggressively pursuing broadband customers, believing that opening larger data pipes will enable them to sell additional services such as private networks, games, streaming audio and video.
SBC CEO Edward Whitacre Jr. called the firm's second-quarter DSL growth (as well as its long-distance customers additions) "tremendous."
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DSL is the cornerstone in SBC's bundling offerings. Earlier this week, the firm invested $500 million in satellite TV provider EchoStar in order to add that company's service to its voice and data offerings.
The companies will deliver "SBC DISH Network" service to customers in SBC's coverage area in early 2004. Work will begin immediately to combine order entry, service and billing operations. They will also develop co-branded set-top boxes that can handle DSL, TV and possibly home networking tasks.
"We will soon be the first telecom company with an integrated satellite TV offering, and long distance freedom in all 13 states looks to be only a few months away," Whitacre said.
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SBC Touts DSL Sign-Ups