In news cheered by Wall St., BellSouth reported it had topped its own projections for reaching 200,000 DSL subscribers in 2000, exceeding goal by 15,000 in 46 markets. It also restated 2001 target of tripling DSL numbers to 600,000 in 63 markets by year- end. Company, which plans to announce 4th quarter and 2000 financial results Jan. 22, said it would expand central office and remote solutions for DSL deployment in coming year. It said goal was to increase coverage to more than 70% of households in its markets by year-end. BellSouth DSL is available now to more than 10 million phone lines and is expected to grow to more than 15 million by the end of the year.
RadarSat International of British Columbia said Tues. it had been officially approved as U.S. Geological Survey business partner. Partnership will allow RSI to distribute commercially N. American and international data from Landsat 7 satellite archived at Eros Data Center.
Financially-troubled CLEC ICG disclosed Tues. it’s trimming workforce by 500 by Jan. 31 as part of reorganization. “This process is a key component of implementing our refined business plan and equal to the progress we have made in reducing overall expenses and improving network performance,” said ICG CEO Randall Curran. ICG went through series of CEOs last fall, amid reports of missed revenue forecasts, downturn in stock prices and shareholder lawsuits. ICG received approval from U.S. Bankruptcy Court, Wilmington, Del., of its agreement with Chase Manhattan Bank to receive $200 million of new debtor-in-possession financing. Company said that as of Dec. 31, it had more than $200 million in cash.
Despite concerns of sales slowdown for wireless equipment, Nokia reported Tues. it had sold more than 128 million phones in 2000, level that it said beat overall market growth. It also reported preliminary estimates of 405 million wireless phone units sold in last year, short of 420 million forecast by rivals such as Ericsson. Still, Nokia said 405 million number marked 45% increase from 1999. In preliminary numbers released before financial results are reported Jan. 30, it also indicated that global wireless subscriber base reached 700 million by year-end, which Nokia said represented international penetration of 12%.
LAS VEGAS -- Broadcasters offering data services are “very comfortable” that they can have good data business without running afoul of congressional pressure for HDTV, Matt Jacobson, exec. vp of iBlast, told CES convention here. Geocast Vp John Abel went further, saying hearing by House Telecom Subcommittee Chmn. Tauzin (R-La.) to pressure broadcasters on HDTV was “baloney.” Abel, former NAB exec. vp responsible for HDTV, also said still- undisclosed DTV test results “tilt in favor of staying the course” for using VSB-based standard.
Cablevision Systems said it aims to install up to 500,000 Sony advanced digital cable boxes in subscribers’ homes this year, starting in June. MSO, which plans to take 3-1/2 years to deploy advanced digital boxes throughout its large N.Y.C. area franchise, said it also intends to start offering IP telephony through its digital set-tops later this year. In addition, Cablevision said it added 100,000 high-speed data customers in 4th quarter, closing 2000 with 239,000 cable-modem subscribers, or 12% of homes marketed. Separately, Cablevision and AT&T completed swap of cable systems in N.Y.C. and Boston areas. As part of trade, AT&T received systems serving 358,000 customers in Boston and eastern Mass., boosting its Boston market cluster to nearly 2 million subscribers and 3.5 million homes passed. In return, Cablevision gained systems in northern N.Y. suburbs serving 130,000 subscribers, as well as $870 million in AT&T stock and about $300 million in cash. With deal, Cablevision’s N.Y. cluster now serves about 3 million homes and passes more than 4 million.
FCC C-block bidding edged up to $14.2 billion Tues. after 39 rounds, with Verizon Wireless solidifying its lead to $6.5 billion. While overall pace of bidding has slowed since auction resumed Jan. 4, Verizon Wireless bids picked up, rising from $5.1 billion in net high bids Mon. AT&T Wireless-backed designated entity Alaska Native Wireless came in 2nd with $2.5 billion, followed by Cingular Wireless-backed Salmon PCS with $1.9 billion. For first time on Tues., 2 N.Y.C. licenses edged up past $1 billion. Previously, Verizon had been bidding $1.17 billion for one license in that market, but it edged up bid for 2nd to $1.27 billion. Alaska Native Wireless is bidding $930.7 million for 3rd license there.
Verizon formally asked Pa. PUC to support Sec. 271 application to FCC for interLATA long distance authority and informed PUC it planned FCC filing in 100 days (around April 20). Verizon’s filing with PUC Tues. said carrier had met all 14 market-opening requirements of Sec. 271 checklist, its Pa. local markets were “fully and irreversibly open” to local competition and CLECs “can compete effectively using our systems.” Verizon said final report by KPMG Consulting on operation support systems test proved its claims: “Our systems scored an ‘A’ on this rigorous test. The results validate the real-world experience of more than 85 competitors who rely on our systems to provide local phone service” in Pa. Verizon said CLECs were serving 670,000 customers using 220,000 resold Verizon lines and 450,000 of their own lines. Verizon said it had implemented 164 interconnection agreements and 1,700 colocation agreements with competitors, had installed 310,000 trunks between its network and those of competitors, and exchanged more than 15 billion traffic min. with CLECs in 2000 -- 32% more than in 1999. Verizon said 85% of its residential lines and 91% of business lines were accessible to CLECs. Local rival AT&T disputed Verizon’s claim of 271 compliance, saying KPMG test failed to provide conclusive proof Verizon could handle commercial volumes of CLEC orders for voice loops and digital subscriber lines on day-to-day basis without glitches. AT&T said CLECs “continue to be hamstrung by Verizon’s wholesale unit” in Pa. local marketplace.
FCC Wireless Bureau denied petitions for reconsideration filed by Alliance for Radio Competition (ARC) and Hugh Taylor on assignment of 900 MHz licenses from Geotek. Last Jan., bureau granted applications for Geotek, which had filed for bankruptcy, to assign licenses to creditors and to assign from creditors to FCI 900, subsidiary of Nextel, licenses not covered by 1995 agreement of Nextel, Motorola, Dept. of Justice. (That consent decree barred Nextel from acquiring 900 MHz licenses in 15 markets.) Bureau also at time accepted FCI request to withdraw applications to assign from creditors to FCI licenses in markets covered by consent decree. ARC had argued that assigning licenses to FCI 900 would decrease competition in dispatch market. Taylor had contended Geotek wasn’t qualified to hold FCC licenses. Bureau concluded that neither ARC nor Taylor had raised new arguments or showed material errors in how decision was made. Order released Tues. reiterated FCC stance that original decision wouldn’t cause competitive harms in affected wireless voice markets.
AT&T shares closed at $22.50, up 12.15% after news that it’s stock was upgraded to strong buy by Morgan Stanley from neutral in report issued Tues. Morgan Stanley, saying it saw better times ahead for AT&T, established 12-month target price of $35 for company, saying stock now was worth $35-$40 per share after falling 66% in 2000, with AT&T Wireless continuing to show strong growth. AT&T cable prospects also were seen as positive. Morgan Stanley remained cautious on long distance business, figuring valuation at zero at current stock price despite generating estimated $15 billion in earnings before interest, taxes, depreciation and amortization (EBITDA) this year, citing company’s debt load of $60 billion. Brokerage said break-up of company would act as performance catalyst over next several months. It also said plan to distribute rest of AT&T Wireless to shareholders plus aggressive asset disposal program should prove beneficial. While acknowledging AT&T’s “challenging” credit position, Morgan Stanley identified its steps to improve situation such as raising nearly $10 billion from NTT DoCoMo, completing $25 billion debt facility, cutting dividend 83%. It said outlook for 4th quarter foresaw AT&T Wireless “looking good,” adding 850,000 subscribers and generating $2.596 billion in revenue, up 38.2% from a year ago. Beyond 4th quarter, broadband IPO outlook still was seen as problem, with regulatory hurdles to overcome and improvement needed in operating and financial metrics. Cable revenue was expected to grow 9-9.5% on pro forma basis in quarter and 10.5-11% in year, including Comcast swap. By end of year, Morgan Stanley said it expected AT&T Broadband digital penetration of 18.5%, largest digital footprint in U.S., with 1.15 million high-speed data subscribers, 550,000-570,000 residential telephony customers and almost 10% penetration, with revenue of $70 million anticipated. AT&T Broadband capital expenditure this year is expected to be robust. AT&T is to release 4th quarter earnings in week of Jan. 29.