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New Services Power Strong Cox Results

5/02/1999 8:00 PM Eastern

New customers for digital cable, telephony and high-speed
Internet services were the catalysts for double-digit growth in Cox Communications
Inc.'s pro forma revenue and cash flow to new heights in the first quarter.

Total cable revenue for the Atlanta-based company rose by
10 percent in the period, to $472.5 million, and basic customers increased 2.8 percent, to
3.8 million, compared with the same period a year ago.

Total basic revenue rose 10 percent, to $351.7 million,
largely due to increases in basic- and digital-cable customers and a fourth-quarter rate
increase.

Operating cash flow rose 26 percent, to $188.5 million.

Cox said it had 99,596 customers for its "Cox Digital
TV" offering as of March 31, up from 74,843 in December and 10,139 in March of last
year. Penetration rates for the digital service more than doubled from the same period
last year, to 3.8 percent from 1.6 percent.

One of the more aggressive MSOs on the telephony front, Cox
said it increased its total digital-telephone subscribers to 41,894, up from 27,819 in
December. Telephony revenue tripled, to $16.2 million from $5 million in the same period
last year. Telephony penetration rose to 5.9 percent from 4.6 percent in December.

Subscribers to the Cox@Home high-speed Internet service
rose to 88,890 in nine markets, from 67,069 in December and 23,910 in March 1998. Data
revenue rose to $9.8 million from $3.4 million last year.

Overall, Cox reported a pro forma revenue increase of 13
percent in the quarter, to $498.5 million, as pay-per-view sales rose and advertising
revenue was up 25 percent.

PPV revenue was $24.4 million for the quarter, up from
$18.1 million a year ago. Four major boxing events were largely responsible for the
increase.

Also last week, AT&T Corp. reported operational
earnings of $1 per share for the first quarter, fueled in part by revenue gains due to
AT&T Broadband & Internet Services' continued growth in digital cable and
high-speed Internet subscribers.

Revenue at AT&T Broadband -- largely the former
Tele-Communications Inc. -- increased to $1.3 billion during the period, up 7 percent from
the same period last year.

AT&T Broadband president Leo J. Hindery Jr. told
analysts during a conference call that the division added about 153,000 new cable
subscribers in the quarter, adding $700 million in market value to AT&T.

The company's digital-cable-subscriber count rose by
204,000, to 1.043 million. AT&T Broadband's goal is 1.8 million digital
subscribers by the end of the year.

AT&T Broadband's @Home Network subscriber count
rose to 47,000 as of March 31. The MSO is targeting 150,000 to 175,000 customers by the
end of the year and 275,000 by year-end 2000.

Availability of two-way plant held back TCI's data
rollout. The cable unit's rebuild was 68 percent done as of March 31, though, and 31
percent of the network was two-way-capable. The goal is to have 51 percent of the plant at
two-way capacity by year's end.

Hindery stressed that upgrade costs were "precisely on
target." He also said bundling tests that the company has been conducting in the
Dallas area have exceeded expectations, with two-thirds of participants in the trial
taking AT&T voice services, 90 percent taking AT&T video services and 10 percent
taking some kind of @Home service.

 

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April