SBC Posts Strong DSL Gains

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Cable broadband competitor SBC Communications Inc. posted an $81 million
first-quarter net loss but also saw strong gains in its digital-subscriber-line
product.

The San Antonio-based Baby Bell added 183,000 new DSL customers for the
quarter, the strongest growth it has seen in a year. SBC has so far racked up
1.5 million DSL lines, a 59 percent increase compared with the same time last
year.

Overall, however, SBC continued to struggle financially, going $81 million
into the red at a loss of 2 cents per share. That compares to a $1.9 billion
profit it posted for the same quarter in 2001.

Much of that loss is blamed on a $1.8 billion charge to revise the value of
its Sterling Commerce unit, in particular related to Sterling's retirement plan
and its cable-television assets. Had SBC not taken the charge, it would have
posted a $1.7 billion profit for the quarter.

Given the continued financial-market doldrums, it doesn't look like SBC will
be reviving capital expenditures anytime soon for Project Pronto, its
once-ambitious DSL-line-upgrade program.

'We are curtailing spending only in areas that do not impact customer
service, and we continue to invest at appropriate levels in our major growth
drivers,' chairman and CEO Ed Whitacre said in a release.

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