Bell Atlantic, Qwest Expect To Hit Analysts' 1999 Targets
NEW YORK -(Dow Jones)- Executives for telecommunications concerns
Bell Atlantic Corp. and Qwest Communications International Inc.,
speaking Thursday at a conference conducted by Banc of America
Securities, reiterated confidence that their companies will hit 1999
financial targets.
James Cullen, chief operating officer at Bell Atlantic (BEL), said
the New York-New England Baby Bell expects revenue to grow by 5% to 6%
to about $32 billion this year and net income to climb 10% to 12% to $3
billion.
Cullen said he expects earnings growth to accelerate up to 15% after
the company completes its $65 billion acquisition of GTE Corp.
Shareholders of GTE (GTE) overwhelmingly approved the deal. The Justice
Department approved it on the condition the companies shed overlapping
wireless properties.
Bell Atlantic and Irving, Texas-bassed GTE say their deal will enable
them to challenge other regional Bells and long-distance providers,
creating more competition nationwide. The acquisition also will bring
new services and benefits to consumers nationwide, the companies say.
Cullen also said Bell Atlantic is making progress in meeting
standards that will allow it to offer long-distance service in New York
and other states. Bell Atlantic, like other Baby Bells, has been trying
to break into the long-distance market for a while now. But no Baby Bell
has yet received Federal Communications Commission approval to offer
long-distance service.
Under the Telecommunications Act of 1996, the Baby Bell phone
companies can't offer long-distance service until they prove to the FCC
that they have opened local markets to competition, which includes
giving competitors access to directory-assistance services and other
elements needed to effectively deliver competitive local-telephone
service. The act contained a 14-point checklist that regulators would
use to measure whether the phone companies had indeed opened their
markets to competition.
Meanwhile, Scott Baxter, Qwest's (QWST) chief strategy officer, said
the Denver-based, long-distance carrier is "very very comfortable" with
analysts' projections for 1999 and 2000. The estimates he endorsed call
for Qwest to have revenue of up to $3.5 billion from communications
services this year.
Banc of America expects Qwest's total revenue, which includes
construction revenue, to be $3.7 billion in 1999 and $4.8 billion in
2000. The firm expects Qwest to have operating cash flow of $777 million
in 1999 and $1.1 billion in 2000.
Qwest is among a new breed of long-distance carriers that are
building national fiber-optic networks based on Internet rather than
traditional phone technology. Qwest's network, scheduled for completion
in the second quarter of 1999, will interconnect more than 130 U.S.
cities.
In addition to building the network, Qwest also is aggressively
pushing its own long-distance service. Because of their cutting-edge
technology, companies like Qwest are part of a group of firms viewed as
a serious challenge to traditional phone such as AT&T Corp.
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