BellSouth Corp. added 97,000 digital-subscriber-line customers in the fourth
quarter of 2002, pushing the telco past the 1 million mark.
But controlled growth seemed to be the watchword in the company's
otherwise-lackluster earnings call.
BellSouth posted net income of $597 million in the quarter, a substantial
drop from $792 million in the year-earlier period.
The telco said the weak economy, competition and technology substitution all
contributed to lower net income and lower revenue.
Excluding Cingular Wireless, quarterly revenue dropped from $6.21 billion
last year to $5.69 billion this year.
For calendar-year 2002, BellSouth added 401,000 DSL subscribers, a slight
drop from 2001's 405,000. The telco said DSL was available to 73 percent of its
households and it had a 6.8 percent penetration in available service areas.
"It's important to grow, but it's more important to grow profitably," chief
financial officer Ron Dykes said. Dykes said DSL contributed $500 million in
revenue to BellSouth in 2002, adding that the business was EBITDA-positive
(earnings before interest, taxes, debt and amortization).
BellSouth's wireline business suffered a 3.2 percent loss in access lines in
2002, while Cingular edged up a mere 1.5 percent.
The company reduced capital expenditures to $3.8 billion in 2002, down from
$6 billion in 2001, and it is forecasting the same or slight lower capex in 2003
compared with 2002.
BellSouth said it's seeing growth in its bundling strategy, with 1.2 million
customers taking a combination of local, long-distance, high-speed-Internet and