High Speed Access Cites Telemarketing In 3rd-Quarter Revenue Rise
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By Tom Locke, Staff Reporter
DENVER -(Dow Jones)- High Speed Access Corp. reported third-quarter
revenue Tuesday that was 67% higher than the second quarter and handily
beat at least one analyst's expectations.
Although just $1.1 million, the third-quarter revenue figure was
almost ten times higher than a year ago, and shows some hefty growth
potential for the Denver provider of high-speed Internet access over
cable TV lines.
The company has some heavy-hitter investors who are likely to help
that growth continue. A 37% owner of the company is Vulcan Ventures, an
affiliate of Microsoft Corp. (MSFT) co-founder Paul Allen. Microsoft,
Cisco Systems Inc. (CSCO), and Com21 Inc. (CMTO) are also investors.
In a Sept. 29 report, Lehman Brothers analyst Brian Oakes had upped
his third-quarter revenue estimate for the company to $757,000 from
$382,000, citing "better-than-expected subscriber additions and quicker
roll-out of systems." But the estimate still turned out to be too low.
President Ron Pitcock told Dow Jones that the revenue boost was
partly due to growing public awareness of Internet access through cable
TV lines and partly due to the company's effective telemarketing.
High Speed Access increased its number of residential subscribers to
9,307 by the end of the third quarter, compared with 5,195 at the end of
the second quarter. And its homes "deployed" - those cable TV homes to
which it could sell Internet-access service because of deployment of
equipment to the cable system - had risen to 1.5 million from 850,000 at
the end of the second quarter.
The Denver company provides high-speed Internet access over cable TV
lines to "exurban" markets, those markets where cable TV systems pass
fewer than 100,000 homes. It enters long-term agreements with cable TV
operators and provides installation, billing, selling and marketing of
the Internet access in return for a portion of the monthly fees paid by
customers.
High Speed Access reported a third-quarter loss of 26 cents per
share, compared with a pro forma net loss, before non-cash amortization
charges, of 25 cents a share a year ago.
The loss beat the mean estimate of analysts surveyed by First
Call/Thomson Financial for a loss of 29 cents for the third quarter.
Pitcock noted that the 400-employee company is realizing lower costs per
customer as its deployment grows and as costs for cable modems and other
equipment declines.
First Call consensus estimates are a loss of 34 cents per share in
the fourth quarter, a loss of $1.69 a share in 2000, and a loss of $1.86
a share in 2001. Those are based on input from four analysts for the
2000 numbers and one analyst for 2001.
Pitcock and Chief Financial Officer George Willett declined comment
on those estimates. They also declined comment on Oakes' revenue
estimate of $1 million for the fourth quarter.
On Oct. 26 High Speed Access announced it had deployed its 80th cable
system to deliver high-speed Internet access, making its total reach
more than 1.5 million homes passed in 26 states.
Pitcock said the company continues to enter into partnerships with
cable TV operators every week. In the small and medium-sized markets
where High Speed Access is focused, those cable operators typically have
tighter budgets and are attracted by the company's turnkey approach.
The exurban market makes up about half of the 96 million cable TV
homes in the United States.
Pitcock said the "Paul Allen halo" is helping the company attract
cable operators, as is its agreement with Northpoint Communications
Group Inc. (NPNT), announced last month. The agreement allows High Speed
Access to integrate Northpoint's digital subscriber line technology into
its services. The DSL service enables the cable operator to reach
commercial customers that aren't reached by cable TV lines.
High Speed Access was created in April 1998 through the merger of
HSAnet of Littleton, Colo., and CATV.net of Louisville, Ky.
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