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To: tech101 who wrote (348)	3/8/2002 12:20:10 AM
From: tech101	Respond to of 366

The Behind Scene Story SBC Growth on Track; May Weigh Mergers Thu Mar 7, 4:51 PM ET By Jessica Hall NEW YORK (Reuters) - SBC Communications Inc. , the No. 2 U.S. local telephone company, said on Thursday it will meet its 2002 growth goals despite a drop in telephone access lines and a sluggish economy. SBC, which is the dominant local telephone company in the Southwestern and Midwestern United States, also said it will develop a national data network, and "will not be timid" about pursuing acquisitions as the industry consolidates. The San Antonio, Texas-based company plans to focus on building its operations in the United States by expanding into new markets such as long-distance voice and data services, Internet and wireless. It does not see much opportunity for growth internationally. Although SBC and other Baby Bells expect new services such as high-speed DSL (digital subscriber line) Internet access to fuel their future growth, these companies still rely on basic telephone service for most of their profits. The local phone market has been slammed by the weak economy and an increasing shift by customers to wireless telephones and electronic mail, which has reduced the number of telephone access lines in service. ... "Long distance, DSL, data, wireless these are the initiatives we're riding to try to stabilize our revenue stream over the next couple of years," Stephenson said. ...... SBC WON'T BE TIMID AS INDUSTRY CONSOLIDATES The company said it may pursue acquisitions as the telecommunications industry consolidates, but it will be careful to avoid deals that would reduce shareholder value. SBC Chairman Ed Whitacre said he believed the U.S. telecom market was poised for another wave of mergers. He called the wireless sector the "ripest" for consolidation. "SBC has never been timid. We won't loose our nerve now ... but we will be vigilant about anything that will be dilutive," Whitacre said. Whitacre did not identify areas in which SBC would consider deals. Although SBC would be "opportunistic" in evaluating potential deals to build its data operations, the company currently plans to grow that business on its own, he said. SBC was built through several mergers, including the acquisitions of Pacific Telesis Group, Ameritech, and Southern New England Telecommunications (SNET). "SBC has been one of the most aggressive consolidators in the industry. It looks like they are ready and poised to pounce when the opportunity is right," said independent telecommunications analyst Jeffrey Kagan. "I think they will be one of the first to jump in to the M&A (mergers and acquisitions) market or even be the first one to kick off the next wave of consolidation," Kagan said. SBC also has a wireless telephone joint venture with BellSouth Corp. called Cingular Wireless, which is the No. 2 U.S. wireless telephone company. Although SBC currently owns 60 percent of Cingular Wireless, Whitacre said he would not rule out a potential wireless deal that left SBC with a minority stake in a merged company.