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Thursday, October 24, 2002 |
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• SBC: DSL numbers up, revenue down • HomePlug takes standard to the next level • Toshiba entices customers with a free audio book • ReplayTV gets a little help from UEI • NCTI gets installers back to basics • MSN 8 takes on AOL 8 in duel for high-speed users • Strong growth in China's broadband market predicted
SBC: DSL numbers up, revenue down SBC Communications Inc.'s third quarter results offer a mixed bag. On the one hand, the company beefed up its DSL subscriber numbers, but on the other SBC suffered a 5 percent year-over-year drop in revenue. According to the service provider, it has become the first company to have 2 million DSL lines in service. It added 226,000 DSL subscribers in the third quarter. During the first three quarters combined, SBC has added 655,000 subscribers, which translates to an 88 percent year-over-year increase. SBC signed up its first DSL customer in August 1999. "Despite a tough regulatory and economic environment, we delivered exceptional results adding DSL Internet subscribers, primarily as a result of effective marketing initiatives and the introduction of SBC Yahoo DSL service," CEO Edward Whitacre said in a release. On a less brighter note, SBC posted revenue of $12.8 billion, down from $13.5 billion in the third quarter 2001. The company's revenue number includes proportionate revenue from Cingular Wireless. Pro forma income was recorded at $1.7 billion, or 51 cents a share. Analysts were calling for EPS of 54 cents, according to Thomson First Call. The company lost 751,000 phone lines to rivals who lease space and resell service on its network. The company lost the lines primarily to AT&T and WorldCom. SBC has announced plans to pare its work force by roughly 20,000, but Whitacre has said that cost-cutting measures are not enough. The company needs help from regulators, according to Whitacre. "We continue to respond aggressively by reducing costs, but no amount of cost-cutting can offset the effects of rules that require us to sell our lines and related services to our competitors below cost," Whitacre said in a prepared statement. Looking ahead to full-year 2002, SBC said it is on target to post earnings of $2.26 per diluted share, before special items. The company did not provide a full-year revenue forecast. As of 12:13 p.m. EDT, SBC shares were trading at $25.71. In the last 52 weeks, the company's shares have traded as high as $40.99 and as low as $19.57. Related stories:
HomePlug takes standard to the next level The HomePlug Powerline Alliance, an industry group working to specify home networking gear that operates over traditional residential electrical wiring, is gearing up for the next version of its technical specification. The new standard, dubbed HomePlug AV, will be designed
to support the distribution of data and multi-stream entertainment
for both standard-definition and high-definition television. HomePlug
AV integrated circuits will be designed to connect PC and home
entertainment devices and enable them to work together seamlessly
throughout a networked home. "As home networking expands
beyond Internet sharing, HomePlug AV will enable simple connectivity
for emerging entertainment applications," said Debashis Pramanik,
NetGear's chief home networking strategist, in a prepared statement.
NetGear is a sponsor of the HomePlug Powerline Alliance. The new standard will not replace the HomePlug 1.0 standard, but rather coexist with it. The HomePlug 1.0 specification was developed last year for transmission over power lines at a data rate of 10 Mbps. Thus far, more than a dozen products have been certified and eight manufacturers are selling products at retail. The HomePlug Powerline Alliance plans to put out a call for interested companies to participate in the development of the new standard by providing technology submissions. The group expects the standard to be finalized in the next 18 to 24 months. Related stories:
Toshiba entices customers with free audio book It's a marriage between audio books and cable modems, and Toshiba America Information Systems and Audible Inc. believe it will be a match made in broadband heaven. Toshiba's Network Products Division has struck an agreement with Audible Inc., a provider of downloadable, spoken audio, to co-market their products. Specifically, Toshiba will offer free audiobook downloads with the purchase of one of its cable broadband products. Toshiba will market Audible's services on retail packaging for its PCX line of DOCSIS cable broadband products. The plan is for the specially marked modems to begin shipping with the spoken audio offer by late 2002. The companies believe their joint efforts will produce a spike in customers. Audible's service requires a high-speed connection for downloading. "Audible's high growth rates benefit immensely from consumers who can access our 34,000 hours of premium content via broadband cable access. We believe this deal will sell more Toshiba cable broadband products and attract new Audible customers," said Foy Sperring, Audible Inc.'s senior vice president of Strategic Alliances. In the first quarter of 2002, Toshiba shipped 430,000 units, which represents 29.3 percent of the market. Related stories:
ReplayTV gets a little help from UEI SONICblue Inc. was looking for a way to add some more bells and whistles to its new line of ReplayTV 5000 digital video recorders, and has turned to Universal Electronics Inc. to make it happen. The newly signed agreement calls for UEI to provide a custom-designed wireless controller and embedded connectivity software that will enable a direct link from the DVR to cable and satellite set-tops. In essence, UEI's technology will enable the ReplayTV 5000s to talk to set-top boxes to ensure the seamless delivery of digital media. "ReplayTV is a vital component of the connected home of the future and making it easy to use is critically important," said Nikhi Balram, vice president of product marketing for SONICblue's connected home products division. SONICblue introduced the 5000 line earlier this week as an alternative to its more expensive 4000 line. Prices range from $299.99 to $899.99 and offer recording capacities of between 40 and 320 hours. The ReplayTV 5000s also have USB connections to link one unit to another throughout the home. The ReplayTV box is battling for market share with TiVo set tops. The two companies have taken different approaches to lure customers. ReplayTV has relied on retail outlets, including Best Buy and Circuit City, while TiVo has spurred its growth through partnerships with operators including DirecTV and AT&T Broadband. According to research firm The Yankee Group, the DVR market is poised for growth. Roughly 1.8 million homes own digital recorders, and that number is expected to skyrocket to 19 million over the next four years. Related story:
NCTI gets installers back to basics Broadband communications training outfit NCTI has rolled out a new program intended to give basic knowledge to new installers. The Quick Start Installer program was designed with inexperienced installers in mind. The program is geared to help installers master specific skills usually learns during the first 90 days of employment. Specifically, the Quick Start Installer program provides targeted information on the drop portion of a cable system, focusing on the basics of aerial and underground installations, multi-dwelling unit installations, service reconnects, disconnects and outlet relocations. "Quick Start Installer is a very flexible approach to training," said NCTI President Tome Brooksher. "It works well for organizations of different sizes." The program can be geared for larger facilities that want to train many installers at once, as well as medium and small organizations. "The program also is customizable to incorporate vendor equipment training and standard operating procedures of a particular company or system," said Brooksher. NCTI, which traditionally develops self-study programs, has designed the Quick Start Installer to incorporate customizable activity labs and CD-ROM support materials. The training can be conducted by an NCTI instructor or a company's in-house training arm.
MSN 8 takes on AOL 8 in duel for high-speed users
SEATTLE -- Microsoft Corp.'s biggest push yet to lure customers to its Internet subscription service kicks off today with Chairman Bill Gates and rocker Lenny Kravitz touting the coolness of MSN 8 in New York's Central Park. In an attempt to trump rival America Online's $100 million campaign to promote its latest service, AOL 8, Microsoft will spend $300 million hyping MSN 8. But the real scramble is to boost broadband hookups, which cost more but speed the delivery of Internet services. About 90 percent of home Web surfers pay $20 to $25 a month for dial-up Web access. Tech companies hope to popularize high-speed cable and DSL hookups that run $40 to $55 a month -- and introduce ways to charge fees for novel services. "The growth isn't in dial-up. It's going to be in taking advantage of the transition to broadband," says David Card, analyst at Jupiter Media Metrix. Broadband usage won't skyrocket overnight, experts say. One reason: Telecoms, which supply cable and DSL lines, continue to haggle with Internet service providers over how to split the take from rising broadband usage. Meanwhile, tech companies are laying the groundwork with: • A software focus. MSN 8 is packed with software that makes it easier to manage e-mail, repel viruses and control how children use the Web. Gates said Microsoft hopes to "empower parents and children to work together to make responsible choices." But cutting-edge functions, such as plugging wireless home networks into the Web, work only with a broadband hookup. • Multiple hookups. For the first time, AOL is providing a special home page designed specifically for broadband users, providing high-speed links to radio programs, music and movie trailers. AOL 8 also allows customers to simultaneously connect up to seven computing devices to a single broadband account. "We absolutely believe broadband is where the opportunity will be in coming years," says Shawn Hardin, AOL's senior vice president for broadband and programming. • New providers. Southwestern Bell and Yahoo last month launched SBC Yahoo, which makes DSL hookups available to 26 million phone customers in 13 states. Yahoo, the popular free Internet portal, is seeking other telecom partners to set up similar deals in other regions, Yahoo spokeswoman Nicki Dugan says.
Strong growth in China's broadband
China's broadband Internet audience will grow by nearly 500 percent during 2002, according to research and consulting firm Strategy Analytics. In a new research report, Strategy Analytics predicts that 2.9m Chinese households will subscribe to broadband Internet services by the end of 2002 and by 2008, some 37m Chinese homes will use broadband. A majority, nearly three quarters, will use a DSL provider, such as China Telecom. In densely populated areas of China, fiber-to-the-home
(FTTH) services have also become popular, in the form of Metropolitan
Area Networks (MANs), but the use of residential cable modem services
has been limited by regulatory restrictions, Strategy Analytics
notes.
• AOL to restate earnings Following an internal audit, AOL Time Warner Inc. announced yesterday it will revise its financial statements from Sept. 30, 2000 to June 30, 2002. The restatement will involve reducing revenue by $190 million. The revision will affect EBITDA of $97 million. The company does not expect further restatements. • National Software Centre taps Nortel Ireland-based National Software Centre has deployed a converged IP voice and data network solution from Nortel Networks. The network will enable NSC to offer high tech businesses the latest communications technology, NDS said. Nortel supplied its Passport 8600 Multiservice Switch, Business Policy switches and Succession Communication Service for Enterprise 1000 IP telephony solution. Financial terms were not disclosed. • Listen.com inks deal with Warner Music Marking their second non-exclusive agreement, Listen.com and Warner Music Group have inked a deal that will give Listen.com to offer securely burned individual tracks from WMG-controlled recordings. The selections will be offered via Listen.com's Rhapsody digital music subscription service. Subscribers will have the option to purchase tracks for 99 cents each beginning Monday, Oct. 28.
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