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Today's report from Web Editor Susan
Rush
• Tough Times Are Brewing At SBC
• AT&T To Slash Dividend
• Blockbuster Launches VOD Trials
• Vyyo Forecasts Q4 Revenue
• Zapping The Future Of Entertainment
• Broadband Briefs
Tough Times Are Brewing At SBC The
impact of a slowing economy, slower than expected DSL rollouts and long
distance hang ups forces SBC Communications
to lower its earnings forecast for next year. Wall Street frowned on the
news: SBC's stock price dropped more than 12 percent late yesterday
afternoon and continued to fall this morning, down another 88 cents during
early morning trading.
SBC is targeting its growth in earnings per share of 11 to 14
percent in 2001, down from analysts' growth predictions of 14.5 percent.
Revenue is expected to increase by 8 to 9 percent next year.
Despite the financial downturn, SBC insists its business
remains strong. "We remain committed to growing through expansion of
our broadband/data, wireless, long distance, national-local and
international businesses," says Edward Whitacre, Jr., SBC chairman and
CEO. The company is confident that it can recover from this slump in 2002
and reach its goals for DSL and long distance.
SBC was trading at $45.69 as of 11:18 a.m. EST.
Related Stories:
Befriending
the Enemy, Broadband Week, 10/00
SBC
Extends DSL Reach,
BroadbandWeek Direct, 8/24/00
AT&T To Slash Dividend
AT&T Corp.'s
stock continued its downward spiral today, following speculation that, for
the first time in the company's history, it will to cut its dividend. Its
share price dropped nearly 4 percent to $19.81 at one point during trading
today. AT&T declined to comment on the possible cut.
If AT&T's board approves the cut, it could
be as high as 77 percent, according to the Wall Street Journal. The
current annual dividend of 88 cents a share could be slashed to as low as 20
cents a share.
If it happens, the dividend cut would be the
latest in a series of recent AT&T moves to whittle down its $62 billion
debt. Last month, the sale of some "nonstrategic assets" was
announced as part of its debt pay down program. AT&T also
announced plans to take out a $25 billion loan from a group of banks to pay
short-term debts. Lenders Credit
Suisse First Boson, Goldman Sachs Group and Chase Manhattan are backing
the deal.
The dividend cut should not come as a big
surprise to shareholder., When the company announced its restructuring plans
in October, it warned it would reduce the dividend during Q4.
Related Stories:
AT&T
Plans Asset Sale, BroadbandWeek Direct, 11/8/00
AT&T:
Split Personalities; Earnings Drop Off, BroadbandWeek Direct, 10/25/00
Blockbuster Launches VOD Trials
Now playing in select cities: video on demand
brought to you by Blockbuster Inc.
and Enron Broadband Services. Movie buffs
in Seattle, Portland, Ore. and Salt Lake City will be the first broadband subscribers
allowed to rent movies directly from their televisions using the new
on-demand service. To participate however, customers must subscribe to a DSL
service offered by one of Blockbuster's affiliates.
In July, Blockbuster cut a 20-year exclusive agreement with
Enron to deliver video-on-demand programming via high-speed digital
subscriber lines. Under the terms of the deal, Enron will stream the content
and store it on servers, while Blockbuster will provide content and serve as
the headend for the service. The service enables consumers to start, stop,
pause, rewind and view movies on demand.
The initial launch meets a self-imposed goal set by the
companies to be offering the service by the end of this year. The duo is
also teaming with Verizon Communications
to conduct technical trials in New York City.
Related Stories:
Blockbuster,
Enron On-Demand Venture Faces Content Questions, Broadband Week, 10/00
Blockbuster
Eyes VOD on DSL, Multichannel News, 7/24/00
Vyyo Forecasts Q4 Revenue
The need for speed is putting money in Vyyo
Inc.'s pocket. The broadband wireless systems maker is forecasting Q4
revenue of $5.3 million, up 18.7 percent from the $1.2 million reported a
year ago.
"Individuals' desire for high-speed Internet access is
on the rise, which we believe will accelerate the opportunity for wireless
technologies to provide broadband access to the mass markets," says
Davidi Gilo, Vyyo's chairman of the board.
Yearly totals for the fiscal year should top $14.6 million,
compared to $4.2 million a year earlier. "These numbers fall right in
line with what we have modeled," says James McIlree, equity analyst at Tucker
Anthony Capital Markets.
Despite the financial growth, the investment firm reiterated
its Market Perform rating on Vyyo over MMDS rollout concerns. "While
the FCC has until March of 2001 to develop
a definitive costing and migration schedule for [high-speed, third
generation] frequencies and has not yet indicated what it will do with the
2.6 GHz band, the outlook for companies like Vyyo and Hybrid is
muddled," explains McIlree.
Vyyo is expected to release its final financial results for
the fiscal year ending Dec. 31 on Jan. 16 after the close of the market.
Stay tuned.
Related Stories:
The
Long Road to Wireless Standards, Broadband Week, 12/00
Wireless
Broadband Fosters Start-up Vendors, Broadband Week, 10/00
Zapping The Future Of Entertainment
Before the ball drops in New York City to signal the dawning
of a new year, ZapMedia Inc. and
EarthLink Inc. plan to deliver ZapMedia's ZapStation hardware reference design and broadband digital entertainment to consumers.
The ZapStation hardware reference design promises to deliver multimedia content to user's home entertainment systems through a broadband connection.
"Broadband is the future of the Internet, and we believe that relationships like the one we've forged with ZapMedia are one of the keys to success for broadband ISPs," says Julie Mantis, vice president of broadband sales at EarthLink.
ZapMedia is using EarthLink's broad customer base to expand its broadband connectivity. The two companies are putting their heads together and developing joint promotions and a co-branded marketing opt-in page for new ZapMedia users.
Related Stories:
Broadband
ISPs Move into Survival Mode, Broadband Week, 12/00
Time
Warner Inks EarthLink Deal, BroadbandWeek Direct, 11/20/00
Broadband Briefs:
- ACTV Inc. sues The Walt Disney Company and
its subsidiaries ABC Inc. and ESPN Inc. for patent infringement. The suit
alleges the Enhanced TV system offered by ABC and ESPN infringes on ACTV's
intellectual property.
-
Optical networking equipment maker Quantum
Bridge Communications Inc. plans an initial public offering that could be
worth as much as $115 million.
-
mPhase Technologies is awarded a U.S.
patent for its "System and Method for Delivery of Digital Video and Data
over a Communication Channel."
-
Tellabs teams with Enitel
to build an optical network off the coast of Norway that will provide
high-speed offshore communications services between oil and gas platforms and
the mainland.
-
Broadband fixed wireless provider Western
Multiplex Corp. expands its international presence by opening an office in
Beijing.
-
ReFlex Communications Inc. plans to
test Pagoo Inc.'s voice over broadband
solution, Broadband Voice Express.
-
UltraVu Inc. will deliver streaming media
services to Terragon Media's GreatVehicles.com Web site. The goal is to offer
streaming media application to online car buyers, so they can "clearly
see and hear the vehicle they wish to purchase," according to the
companies.
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