Adelphia May Fly Solo on Telephony

Author:
Publish date:
Updated on

Adelphia Communications Corp. may tackle residential
telephony sales by itself, instead of doing a joint venture with AT&T Corp.

In a conference call with analysts discussing the company's
third-quarter financial results last week, Adelphia executive vice president Timothy Rigas
said the MSO was leaning toward offering a residential telephone service next year through
its Adelphia Business Solutions subsidiary.

ABS primarily offers telephone services to business
customers in several markets in the Northeast and mid-Atlantic regions.

Previously, Adelphia officials said they were in talks with
AT&T about partnering on residential phone service. But those talks don't seem to be
bearing fruit.

"We haven't heard a lot of progress on the AT&T
front," Rigas said. "I assume we will launch our own residential telephony,
using the [ABS] backbone to effectively roll out a telephony product."

Rigas added that Adelphia expects to begin rolling out
residential telephony in the first half of 2000, with customers being added to the service
in the second half of that year.

On the high-speed-data front, the MSO expects to offer both
its own "Power Link" high-speed service and similar service from Excite@Home
Corp.

While Adelphia never reached an agreement to become an
Excite@Home affiliate, it inherited some Excite@Home-affiliated systems as part of its
1999 acquisition binge.

"Looking forward, we found @Home to be very responsive
to our needs in rolling out the product," Rigas said during the conference call.
"Effectively, we can have Power Link and @Home in our systems."

The company added roughly 6,000 high-speed-data subscribers
in the quarter, but that fell short of earlier targets. Adelphia said it delayed marketing
efforts until it completed rolling out standardized Data Over Cable Service Interface
Specification modems.

"We may have been too aggressive" with data
targets, Adelphia vice president of finance Jim Brown said. As of Sept. 30, Adelphia had
32,000 data subscribers, and it expects to ramp up to about 7,000 new installs per month
by next year's first quarter.

The MSO exceeded expectations on digital services, though.
Adelphia added about 25,000 new digital customers during the third quarter, and it has a
total of 171,000 digital subscribers

In the third quarter, Adelphia reported pro forma revenue
growth of 12.4 percent, to $242.3 million. Cash flow rose 18.8 percent, to $87.4 million,
on a pro forma basis.

The net loss for the quarter rose to $56.9 million, or 95
cents per share, from a $43.1 million loss ($1.21) in the same period last year.

Adelphia said it added about 11,000 new basic subscribers
in the quarter, and 12-month customer growth was 1.9 percent. Subscriber growth during the
past 12 months was 1.9 percent. The MSO has about 4.9 million subscribers.

Telephone-access lines at ABS grew by 58,968 to 250,253.

Related