SBC will maintain over 9 B in spanding, and builid broadband network :
"Growth in the telecom industry has slowed to a crawl so they highlighted
their
ability to cut costs," Hodulik said. "While growth in
the core business is still
expected to suffer, they said that would be offset by
strength in DSL, long distance
and data services."
Targeted having more than 2 million DSL Internet access
service subscribers at year-end 2002,
a more than 50 percent year-over-year increase. SBC is poised
to compete even more
effectively and vigorously when the regulatory requirements and costs
become more certain for
all data/broadband providers.
Long-Distance Data/IP Entry
SBC discussed how gaining approval to provide long-distance services has created a substantial new
market opportunity for the company, which now can offer broader long-distance data/IP services.
Industry research shows that approximately three-quarters of the ATM and frame relay market is
dependent on long-distance services that SBC until recently has not been able to provide on its own
networks.
IP/ATM, DSL and soft switch are major ravenue drivers for Alcatel at SBC , VZ, Bell South and Sprint.
SBC and Sprint are now major ALA customers for metro grears, optical cross-connect ands fiber optic cable.
SOURCE: SBC Communications Inc.
SBC Reaffirms 2002 Outlook, Updates Growth and Expense
Management Opportunities
SAN ANTONIO--(BUSINESS WIRE)--March 7, 2002--
Company reaffirms full-year 2002 EPS growth rate of 5 percent to
7 percent and first-quarter earnings target of $0.49 to
$0.51 per diluted share, before one-time items and
including the effect of FAS 142
Announces National Data and IP Market Entry
SBC Communications Inc. (NYSE:SBC - news) today reaffirmed its previously issued full-year and
first-quarter earnings targets and provided updates about the company's opportunities for revenue
growth and expense management.
During a conference for analysts in New York today SBC:
Reaffirmed its previously announced target of 5 percent to 7 percent growth in earnings per
share for 2002 and first-quarter earnings of $0.49 to $0.51 per diluted share; both targets
include FAS 142 and are before one-time items and the cumulative effect of accounting
changes. SBC also reaffirmed its full-year revenue growth target of 1 percent to 3 percent and
its expectation of generating $1.5 billion to $2 billion in free cash flow after dividends in 2002.
Announced its entry into the long-distance data/IP market, an estimated $38 billion market to
which SBC previously had little access because of regulatory restrictions on providing long-
distance services.
Targeted having more than 2 million DSL Internet access service subscribers at year-end 2002,
a more than 50 percent year-over-year increase. SBC is poised to compete even more
effectively and vigorously when the regulatory requirements and costs become more certain for
all data/broadband providers.
Long-Distance Data/IP Entry
SBC discussed how gaining approval to provide long-distance services has created a substantial new
market opportunity for the company, which now can offer broader long-distance data/IP services.
Industry research shows that approximately three-quarters of the ATM and frame relay market is
dependent on long-distance services that SBC until recently has not been able to provide on its own
networks.
Deployment of SBC's expanded data/IP network and related services has already begun in states where the company is able to offer
long- distance services today - Texas, Missouri, Oklahoma, Kansas, Arkansas and Connecticut. Networks in these six states are linked
to SBC's out- of-region facilities in Seattle, New York, Miami, Boston and Herndon, Virginia.
The network will expand even farther after regulators allow SBC to compete in additional long-distance markets. Currently, SBC can
originate long-distance data services from all states except the seven in which the company has yet to obtain long-distance regulatory
approvals - California, Nevada, Illinois, Ohio, Michigan, Indiana and Wisconsin.
Much of SBC's data/IP network was built out last year; completion of in-region network connections already is part of SBC's 2002
capital expenditure budget targeted between $9.2 billion and $9.7 billion.
The new network capabilities will support an enhanced, standardized portfolio of national data and IP services, as well as
comprehensive guarantees that specified service and security standards will be met in both the local and long-distance portions of the
network.
Management Provides Updates on SBC Strategies and Initiatives
In addition to reaffirming full-year and first-quarter earnings targets and making its long-distance data/IP network and DSL target
announcements, SBC executives commented on the company's growth strategies and additional expense management opportunities.
Highlights include:
Residential customer service levels across SBC never have been better. Based on access lines, SBC has tripled in size during the
past five years, growing from the smallest regional telephone company into the nation's No. 2 provider of telecommunications
services. SBC has made the investments necessary to maintain service levels that SBC's customers demand and deserve.
Cingular Wireless continues to focus on adding the highest-value customers, which are those who are under contract for digital
services. As a group, these customers tend to have good credit, spend more than $50 a month on wireless services, and have a
low churn rate. In the fourth quarter of 2001, Cingular added 760,000 digital-contract customers, a category that now
comprises 75 percent of Cingular's total customer base.
SBC's chief financial officer, Randall Stephenson, said the company and its shareowners continue to benefit from SBC's
financial strength and flexibility resulting from the company's strong cash flows, high-quality balance sheet and industry-leading
credit ratings. SBC cash flows allow the company to fund its growth plan while delivering value directly to shareowners in the
form of dividends and share repurchases. Over the past two years, SBC has committed approximately $11 billion to dividends
and share repurchases, and it is the only large-cap telecommunications company to have increased its dividend every year in its
history - since 1984.
The company also said it believes that it can generate about $1.5 billion in annual cost savings within four years by reducing
expenses through three specific initiatives:
Call-center consolidation and systems enhancements: In the second half of 2002, SBC will launch a comprehensive, four-year
initiative to consolidate call centers across the nation and install new knowledge-based sales and service systems to increase
productivity, improve customer service and reduce expenses. SBC targets annual savings of $700 million by year four.
SBC's ``Tech of the Future'' program gives its installation and maintenance workers wireless laptops called Intelligent Field
Devices that enable them to work more efficiently while in the field. Already 25,000 employees are equipped with the devices
through which technicians can remotely access virtually any information they need, as well as speed up their work. Today,
SBC announced it is expanding the initiative to employees in its data and central office areas. In 2002, the company expects the
initiative to generate about $150 million in annual savings, growing to $250 million annually when the program is fully
implemented.
Throughout 2002, SBC will continue to reduce its work force in areas not directly impacting customer service or responsible
for growing data or long-distance revenues. In the last five months, the company has reduced its total work force by about
7,500 positions.
Cautionary Language Concerning Forward-Looking Statements
Information set forth in this news release contains financial estimates and other forward-looking statements that are subject to risks
and uncertainties. A discussion of factors that may affect future results is contained in SBC's filings with the Securities and Exchange
Commission. SBC disclaims any obligation to update or revise statements contained in this news release based on new information or
otherwise.
SBC Communications Inc. (www.sbc.com) is one of the world's leading data, voice and Internet services providers. Through its
world-class network and its subsidiaries' trusted brands - SBC Southwestern Bell, SBC Ameritech, SBC Pacific Bell, SBC Nevada Bell,
SBC SNET and Sterling Commerce - SBC companies provide a full range of voice, data, networking and e-business services, as well
as directory advertising and publishing. A Fortune 15 company, America's leading provider of high-speed DSL Internet Access
services and one of the nation's leading Internet Service Providers, SBC companies currently serve nearly 60 million access lines
nationwide. In addition, SBC owns 60 percent of America's second-largest wireless company - Cingular Wireless - which serves more
than 21 million wireless customers. Internationally, SBC has telecommunications investments in 28 countries.
SOURCE: SBC Communications Inc.
Contact:
SBC Communications Inc.
Larry Solomon, 210/351-3990
solomonl@corp.sbc.com
www.sbc.com |
