AT&T Broadband turned in what its CEO called a 'solid' third quarter,
with revenue rising 6.4 percent even though basic subscribers continued to
decline, this time by 129,000.
On a pro forma basis, adjusting for system deals during 2001, the revenue
gain, to $2.547 billion, worked out to 8.2 percent versus the same period a year
CEO Bill Schleyer said during a conference call that the MSO was sticking to
guidance of 'low-double-digit' revenue growth for the year.
Growth in the quarter came from net additions in digital video (up 285,000
units to 4.2 million), high-speed data (up 172,000 to 1.9 million) and telephony
(up 102,000 to 1.3 million).
Basic subscribers -- AT&T Broadband ended the quarter with 13.1 million
-- primarily fled to direct-broadcast satellite and other competitors, mostly in
nonrebuilt systems, Schleyer said. But September was a strong month, producing
net subscriber gains, and the fourth quarter looks like it will be the year's
best 'by far,' he added.
AT&T Broadband lost 124,000 basic subscribers in the second quarter and
179,000 in the first.
During September and October, when basic subscribers rose, Schleyer said
AT&T Broadband did some more mass advertising but didn't do anything
different in terms of pricing or packaging.
Repackaging and repricing of digital-video services did have an impact, he
added, making those services more profitable but trimming monthly disconnect
Excluding $107 million in what were called expenses related to the MSO's
pending merger with Comcast Corp., AT&T Broadband's EBITDA margin -- or
earnings before interest, taxes, depreciation and amortization costs as a
percentage of revenue -- was 26.5 percent, which Schleyer called the best in two
He credited cost reductions and savings from 'scaling' the MSO's
high-speed-data and telephony businesses.