Re: ATT Increasing Revenues - Digital TV, Cable Telephony, and CM (Too bad they hit their goals)
Thread- I see why ATT has been trashed lately. They reached their goals set in December 1999.
Sommers Dec 1999 projections:
-2.5 million customers for digital TV
-700,000 for cable modems
-400,000 for telephony
So let's see where 2000 will now end:
-3 million customers for digital TV
-1,000,000 for cable modem
-500,000 for telephony
Now it's all clear. You are only supposed to have goals, not reach them.<g> -MikeM(From Florida)
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AT&T PAINTS BULLISH BROADBAND PICTURE
At 1999 Analyst Meeting Company Touts Telephony, High-Speed Data and Interactive TV Upside
December 1999-- During AT&T Corp.'s 1999 analyst meeting in December, executives painted a bullish picture for the company's broadband business in an effort to counter Wall Street criticism about the high price of AT&T's cable acquisitions, poor operating performance, and slow local telephone service rollout.
AT&T's chief financial officer Daniel E. Somers was appointed president and CEO of AT&T Broadband and Internet Services, the company's cable unit in December, replacing outgoing president Leo Hindery, Jr. He pledged to turnaround the operations of Tele- Communications Inc. that AT&T purchased, manage a smooth merger with MediaOne, complete plant upgrades, accelerate the deployment of cable communications services, and boost operating cash flow (OCF).
"I don't like being last in our industry in terms of operating performance. Over the next 12 months our key objective is to become the best," said Sommers.
While Sommers admitted OCF at AT&T BIS would remain flat early in 2000, he predicted the unit would finish the year with double-digit growth. Additionally, Sommers promised revenue growth of 12 to 14 percent next year with the increased deployment of telephony, cable modem, digital video, and interactive TV services.
Sommers said 51 percent of TCI's networks had been upgraded for two-way services with that total expected to reach 85 percent by the end of 2000.
AT&T will finish 1999 with 1.8 million digital TV customers and 175,000 cable modem subscribers, but less than 10,000 local telephone customers. At year- end 2000 Sommers said AT&T will count more than 2.5 million customers for digital TV, 700,000 for cable modems and 400,000 for telephony.
Telephony Trends
With fewer than 10,000 cable telephone customers, AT&T is trailing the rollouts of Cox Communications and MediaOne, which count more than 100,000 and 50,000 local telephone subscribers, respectively.
According to Curt Hockemeier, executive vice president and chief operating officer, telephony operations, AT&T BIS, the company is selling local telephone service in 13 communities located in four metro areas: Chicago, Dallas, Denver, and San Francisco. Additionally, Hockemeier said AT&T BIS has started "operational readiness tests" in four other markets: Pittsburgh, Portland, Salt Lake City, and Seattle.
While AT&T's local telephone rollout has been slow in 1999, Hockemeier says the company is pleased with the initial results. AT&T cable telephone customers are now spending an average of $70 per month on local and long distance services. Currently, churn is less than 1 percent and penetration is growing fast.
"In the first 15 days of November, both in Fremont, Calif. and Arlington Heights, Ill., our people sold 1-percent penetration of marketable homes," said Hockemeier.
Hockemeier said AT&T will pickup the pace of its telephony deployment in 2000. By the end of the year, AT&T expects to be offering local telephone service to some 6 million homes passed, including MediaOne cable systems, and count more than 500,000 customers. Ultimately, the company expects to achieve 30-percent penetration of homes marketed by 2004.
All of AT&T's initial telephone offerings will use circuit-switched platforms with Nortel-Antec venture Arris Interactive continuing to serve as the lead supplier. While circuit-switched technology is currently expensive, costing $840 per new subscriber, AT&T expects it to quickly drop to $590.
AT&T is still committed to migrating to IP telephony, but does not believe the technology will be ready for deployment until at least the end of 2000.
Cable Modem Momentum
Once the laggard among Excite@Home affiliates, AT&T is now starting to lead the charge to accelerate cable modem subscriber growth.
According to Sommers, AT&T was only installing 250 new @Home customers per day in the first quarter of 1999. By December, AT&T had boosted that total to 1,400 installs per day. AT&T expects to finish the year with 175,000 cable modem customers, while MediaOne will count more than 210,000 customers.
Sommers said AT&T is on target to push past the 700,000-subscriber mark next year on its former TCI systems, meeting a threshold required to maintain its control within Excite@Home. MediaOne's contribution will push AT&T's total cable modem customer base past 1.1 million in 2000.
According to Sommers, embracing retail distribution and customer self-installations will be key to achieving the company's growth targets.
"We need to have a retail presence and we're working hard to deliver that," said Sommers. "Our goal is to get to 35-percent individual installations by the customer by the end of the year 2000."
Interactive TV Initiative
AT&T is on track to finish 1999 with more than 1.8 million digital cable customers and plans to begin offering interactive TV services in mid-2000, initially using General Instrument Corp.'s DCT-5000 set-top box and Microsoft Corp.'s TV platform.
According to Sommers, AT&T's digital TV deployment is meeting expectations, having achieved an average 17-percent penetration of homes marketed for the service. In Tacoma, Wash. AT&T has pushed that total to 33 percent and reached 25 percent in Dallas and Denver.
Laurie Priddy, president and CEO of AT&T's National Digital Television Center, provided a sneak peek at the company's interactive TV service, showing initial navigation templates designed with Excite@Home.
While high-speed Internet access will be available through the platform, AT&T is betting on a range of TV-centric, IP-based entertainment and communications applications to drive usage.
Priddy predicted the platform will generate $120 in annual revenue per subscriber in 2004, with the bulk of that total coming from advertising and e-commerce.
"At $120 per household you're looking at $1 billion in revenue when you get to substantial penetration," said Priddy.
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