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Today's report from Web Editor Susan
Rush
• 'Tis The Season For Financial Downturns
• All Is Well At Qwest
• Hughes Acquires Telocity
• Excited About Broadband
• Residential Gateways Come Into Their Own
• Broadband Briefs
Editor's Note: BroadbandWeek Direct will not be published from
Monday, December 25, 2000 through Monday, January 1, 2001. Daily news will
return on Tuesday, January 2. Happy holidays.
'Tis The Season For Financial Downturns It's
possible that many telecom companies releasing their quarter earnings this
week are hoping that investors have started their Christmas holiday early
this year. Well, not all wishes come true. Lucent and AT&T are taking a
beating on Wall Street today, following reported greater-than-expected
financial losses.
A weak market and declining sales forces Lucent
Technologies Inc. to restate its fourth quarter results and lower its
expectations for the first fiscal quarter of 2001. Fourth quarter revenue is
being restated as $8.7 billion, down from the earlier projection of $9.4
billion. The company now expects a pro forma net loss of 25 cents to
30 cents a share for Q1 2001, a huge difference from the analyst forecast of
a 1 cent loss per share.
The news sent Lucent's stock tumbling, down 10 percent to
$13.94 as of 12:25 p.m. EST. This latest drop, sends the telecommunications
equipment maker's stock below its 52-week low of $14.31.
AT&T Corp.'s stock sank
below its 52-week low of $18.25, dropping 9.9 percent to $17.06 during
midday trading. The slip is a direct result of the company's warning that
its earnings and revenue will be lower than previously expected for Q4 2000.
Operational earnings per share for the quarter will be between 26 cents to
28 cents, compared to the 29 cents to 33 cents projected earlier. Overall
top-line revenue growth was also cut to an increase of 2.5 percent to 3
percent, from the 4 percent to 5 percent AT&T was calling for just two
months ago. Adding insult to injury, AT&T confirmed that it will slash
its dividend by 83 percent.
Related Stories:
AT&T
To Slash Dividend, BroadbandWeek Direct, 12/20/00
Lucent
Falls Below Expectations,
BroadbandWeek Direct, 10/11/00
All Is Well At Qwest
In what seems to be a rare occurrence these
days, a telecom company has some good news: Qwest
Communications International Inc. expects to meet Q4 estimates.
According to analysts' estimates, the company is expected to earn 14 cents a
share for the quarter. Investors obviously like the sound of this new tune;
Qwest's stock price was up nearly 5 percent to $33.94 as of 11:33 a.m. EST.
Qwest believes it has side stepped having the
problems other telecoms are having because it has newer assets, lower costs
and is focusing on high-growth markets such as broadband Internet and
wireless communications. In the DSL arena, the company says it is on track
to sign up 250,000 subscribers by year's end, and expects to double that
number by the end of 2001.
In September, the company projected revenue of
$18.8 billion to $19.1 billion in 2000, and $21.3 billion to $21.7 billion
in 2001. Joseph Nacchio, Qwest's chairman and CEO, reconfirmed these
projections today.
Related Stories:
Qwest
Quickens DSL Pace, Broadband Week, 10/10/00
Qwest
Spins Off Digital Media Unit, BroadbandWeek Direct, 9/7/00
Hughes Acquires Telocity
Hughes
Electronics Corp. is hoping that satellite and DSL will be a winning
combination. The satellite service provider is forking over $179 million in
cash to acquire competitive DSL provider Telocity
Inc. The deal enables Hughes to offer a suite of consumer entertainment
and information services including digital multichannel television, and
wired and satellite broadband services on a national scale.
"By bundling Telocity's capabilities with
the high-quality offerings of DirecTV, we will offer consumers...digital
satellite entertainment and high-speed DSL Internet access through a single
portal into their homes," says Eddy Hartenstein, senior executive vice
president of Hughes. The service will initially be targeted to the existing
9 million DirecTV customers, with plans to expand the offering at retail in
the future.
Telocity's stock jumped nearly 49 percent, or 69
cents, to $2.09, while Hughes' stock faltered slightly, down 11 cents to
$22.09 during early morning trading.
Related Stories:
Aveo
Teams With Excite@Home and Telocity, BroadbandWeek Direct, 12/19/00
You've
Got Broadband, Broadband Week, 12/00
Excited About Broadband
Here's looking at 1.2 million more households. Excite@Home
extends its broadband footprint through a deal between small market-oriented
@Home Solutions, a partially owned subsidiary of Excite@Home, and Mediacom
Communications Corp.
The new affiliation will enable Mediacom to offer
Excite@Home's high-speed broadband Internet service to its customers, which
currently are serviced by ISP Channel
Inc. The binding commitment, which is subject to a completed final
agreement between @Home Solutions and Mediacom, is expected to extend
Excite@Home's overall broadband footprint to more than 88 million homes
worldwide.
Related Story:
ISP
Channel Folds, BroadbandWeek Direct, 12/11/00
Residential Gateways Come Into Their Own
Growing from near obscurity in 1999 to a $100 million
industry in 2000, the residential gateway market is about to explode,
according to research from Cahners In-Stat
Group, a sister company to Broadband Week. Integrated voice,
video and data services along with home networking and other value-added
services will boost the RG market into a $5 billion industry in 2005,
according to the new report.
"The residential gateway is the waterfront property of
the digitally connected home of the future," says Mike Wolf, director
of Enterprise and Residential Communications for In-Stat. "All the
major markets are seeing a move towards delivering more value to the end
user, and the residential gateway will play a major role."
The Residential
Gateways: Unleashing the Broadband Services Tsunami report features an
overview of RG technology and forecasts the emerging market by type,
including regional breakdowns. It also examines consumer buying habits and
profiles various RG vendors.
Related Stories:
Living
The Digital Life, BroadbandWeek Direct, 10/28/00
Net
Neighborhood Unveiled, Broadband Week, 9/00
Broadband Briefs:
- Liberate Technologies experiences a
lower-than-expected loss for its fiscal second quarter. The interactive
software provider posted a net loss of 66 cents a share, significantly less
than the projected 82 cents a share loss that analysts were predicting.
Liberate's stock price was soaring during midday trading, up 21.6 percent to
$13.38.
- America Online Inc.
and Time Warner are looking for a
speedy approval. America Online told the FCC that if their merger was not
approved by the end of the year, it would suffer the "substantial
burden and expense" of having to file partial-year taxes. In an effort to
reassure investors, the duo reiterated they remain confident that their
$108 billion merger will close at the end of the year or in the very early
days of January. AOL's stock price fell 6.3 percent to $34.90, while Time
Warner slipped 5.1 percent to $52.65 during early morning trading.
- Time Warner Cable gives the gift of speed. TWC will offer its high-speed
online Road Runner service to University of
Akron students and full-time employees who live in the northeast Ohio Time
Warner service area at a reduced rate -- $19.95 a month. The in-kind gift is
valued at $2.5 million over the next three years.
- AT&T Corp. wins approval from the
Pennsylvania Public Utility Commission to offer local telephone service to
customers over its cable lines. AT&T reportedly plans to spend in excess
of $300 million to upgrade its cable infrastructure in Pittsburgh and other
surrounding cities.
- MSHOW.com and Akamai
Technologies Inc. form strategic partnership. MSHOW.com plans to use
Akamai's globally distributed platform and streaming delivery network to power
it Internet communications services. MSHOW.com currently offers streaming
media capabilities, Web conferencing tools and interactive broadcasting
services.
- Vesta Broadband
Services teams with BroadbandNOW Inc.
to offer NetMovies, Vesta's IP-based video on demand
service, to BroadbandNOW's high-speed Internet customers.
- Deutsche Telekom subsidiary T-Mobile
International selects Nortel
Networks to supply wireless Internet infrastructure equipment and services
for build out of its high-speed, third generation UMTS (Universal Mobile
Telecommunications System) networks across Europe. The deal is valued at $320
million.
- Streaming21 Inc. inks a deal with Stockscape.com
Corp. to provide streaming media services to Stockscape.com's more than
900,000 members.
- DATACentric Broadband secures venture
financing from Enron Investment Partners and Redstone Equity Fund I. DCB will
use the funds to expand its existing network and continue deployment of its
wireless broadband infrastructure throughout Texas in 2001.
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