AT&T Broadband Margins Up, Still Lag

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AT&T Broadband reported its third consecutive quarter of cash-flow margin
growth, although its most recent figure is still far below industry
benchmarks.

Cash-flow margins for the period were 25.2 percent, up from 19.5 percent in
the second quarter and an anemic 16 percent in the first quarter. AT&T
Broadband attributed the rise to increased revenue and operating efficiencies
resulting from cost controls, mainly achieved through restructuring and
layoffs.

Pro forma revenue was up 15 percent to $2.4 billion. Cash flow was up 70
percent to $602 million from $355 million in the same period last year.

But AT&T Broadband generated about 447,000 new-revenue-generating units
in the quarter, down from the 551,000 generated in the second quarter,
indicating that new-product growth is slowing.

Cable-telephony adds were 76,000 in the quarter, down from the 148,000 added
in the prior quarter.

Digital-subscriber additions also slowed, to 260,000 from 274,000.

In high-speed data, the MSO added 111,000 customers, down from 129,000 in the
second quarter.

Basic subscribers rose by 43,000 customers, or about 1 percent in the period,
to 13.7 million.

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