Verizon Communications, the largest U.S. telecommunications company, saw its second-quarter earnings rise 18 percent on the sale of its Hawaii local telephone business, the carrier said Tuesday.
Verizon, which is trying to close its $8.6 billion purchase of MCI, said it earned $2.11 billion, or 75 cents per share, compared with earnings of $1.8 billion, or 64 cents per share, in the same period a year earlier.
Excluding a $336 million gain from the Hawaii sale and other one-time items, Verizon said it earned $1.77 billion, or 63 cents per share. Revenue rose 4.6 percent to $18.57 billion, as its Verizon Wireless unit added 1.9 million new customers.
Analysts on average had expected Verizon to earn 64 cents per share before one-time items on revenue of $18.63 billion, according to Reuters Estimates.
The company raised its forecast for capital spending in 2005 to a 15 percent increase from the $13.3 billion spent in 2004, up from 10 percent. Verizon said the increase was due to growth in its wireless unit and the rollout of video services.
Wednesday, July 27, 2005
Tuesday, July 19, 2005
DSL Growing Faster than Cable Internet
Financial research firm Morgan Stanley released data that shows telecom companies are signing up new broadband users by a wider margin over cable services. Analysts expect 1 million new DSL lines during the quarter, which would constitute 55 percent of all new broadband subscribers.
Morgan Stanley analyst Simon Flannery wrote in a research note to clients Monday that the fight for market share was critical to telecoms as a way to recoup possible losses from the rise of VoIP services, and to add revenue in the near term.
DSL providers have become much more aggressive in pricing for Internet services. In early June, SBC announced that it would offer DSL access for $14.95 USD per month. Verizon, another DSL provider, offers broadband access for $29.95 USD and includes MSN Premium as part of its subscription package
Morgan Stanley analyst Simon Flannery wrote in a research note to clients Monday that the fight for market share was critical to telecoms as a way to recoup possible losses from the rise of VoIP services, and to add revenue in the near term.
DSL providers have become much more aggressive in pricing for Internet services. In early June, SBC announced that it would offer DSL access for $14.95 USD per month. Verizon, another DSL provider, offers broadband access for $29.95 USD and includes MSN Premium as part of its subscription package
Monday, July 18, 2005
US telecoms seen beating cable on broadband in Q2
By Justin Hyde
WASHINGTON, July 18 (Reuters) - U.S. local telephone companies likely outgunned the cable industry last quarter in the race for new high-speed Internet subscribers by their widest margin to date, according to analysts' estimates.
Industry experts say the sales figures for broadband lines due to be released with second-quarter earnings reports over the next couple of weeks are likely to be among the few bright spots in an otherwise lackluster period for the dominant telephone companies.
"Share of broadband subscribers is critical to telecom companies as a defense against competition from VOIP (voice over Internet protocol), as well as a major driver of near-term revenue growth," Morgan Stanley analyst Simon Flannery said in a research note on Monday.
Several analysts expect telephone companies to report roughly 1 million new digital subscriber lines for the second quarter. While such a total would be down about 20 percent from the first quarter's growth rate, analysts say it would still be good for 55 percent of all new broadband subscribers.
Only a year ago, telephone companies such as Verizon Communications Inc. (VZ.N: Quote, Profile, Research) and SBC Communications Inc. (SBC.N: Quote, Profile, Research) were just pulling even with cable companies in new high-speed Internet lines. Since then, the "Baby Bells" have become more aggressive in selling DSL lines, on the theory that broadband subscribers are far less likely to switch services.
Last month, SBC announced it would offer its DSL service to new users for $14.95 per month for one year. Analysts say that promotion will give it roughly 400,000 new DSL lines, about 27 percent more than for the same period a year earlier. Estimates for Verizon and BellSouth Corp. (BLS.N: Quote, Profile, Research), which have been less aggressive in their DSL promotions, range widely.
Outside of DSL growth, analysts expect the Bells to report flat earnings before one-time items in the second quarter.
Banc of America analyst David Barden estimates the Bells lost 1.8 million consumer lines in the quarter, hurt by seasonal effects like vacationers and college students disconnecting services, by strong wireless growth and by cable companies pushing their voice services.
Even with that decline, the revenues at the Bells are expected to have held steady through DSL and long-distance sales.
"Despite poor expected line performance, financial performance at the Bells could well hold up on the wireline side," Barden said in a research note.
While shares of the Baby Bells have tracked just behind the broader Standard & Poor's 500 Index over the past two months, they still trail the index for the year so far. Analysts say the Bells' steady dividends and cash flow provide a floor to their share prices, while recent mergers, billions of dollars in network upgrades and shrinking traditional business temper any upside.
"To a great degree the market is already discounting the major challenges the wireline sector faces," said Goldman Sachs analyst Jason Armstrong in a research note.
WASHINGTON, July 18 (Reuters) - U.S. local telephone companies likely outgunned the cable industry last quarter in the race for new high-speed Internet subscribers by their widest margin to date, according to analysts' estimates.
Industry experts say the sales figures for broadband lines due to be released with second-quarter earnings reports over the next couple of weeks are likely to be among the few bright spots in an otherwise lackluster period for the dominant telephone companies.
"Share of broadband subscribers is critical to telecom companies as a defense against competition from VOIP (voice over Internet protocol), as well as a major driver of near-term revenue growth," Morgan Stanley analyst Simon Flannery said in a research note on Monday.
Several analysts expect telephone companies to report roughly 1 million new digital subscriber lines for the second quarter. While such a total would be down about 20 percent from the first quarter's growth rate, analysts say it would still be good for 55 percent of all new broadband subscribers.
Only a year ago, telephone companies such as Verizon Communications Inc. (VZ.N: Quote, Profile, Research) and SBC Communications Inc. (SBC.N: Quote, Profile, Research) were just pulling even with cable companies in new high-speed Internet lines. Since then, the "Baby Bells" have become more aggressive in selling DSL lines, on the theory that broadband subscribers are far less likely to switch services.
Last month, SBC announced it would offer its DSL service to new users for $14.95 per month for one year. Analysts say that promotion will give it roughly 400,000 new DSL lines, about 27 percent more than for the same period a year earlier. Estimates for Verizon and BellSouth Corp. (BLS.N: Quote, Profile, Research), which have been less aggressive in their DSL promotions, range widely.
Outside of DSL growth, analysts expect the Bells to report flat earnings before one-time items in the second quarter.
Banc of America analyst David Barden estimates the Bells lost 1.8 million consumer lines in the quarter, hurt by seasonal effects like vacationers and college students disconnecting services, by strong wireless growth and by cable companies pushing their voice services.
Even with that decline, the revenues at the Bells are expected to have held steady through DSL and long-distance sales.
"Despite poor expected line performance, financial performance at the Bells could well hold up on the wireline side," Barden said in a research note.
While shares of the Baby Bells have tracked just behind the broader Standard & Poor's 500 Index over the past two months, they still trail the index for the year so far. Analysts say the Bells' steady dividends and cash flow provide a floor to their share prices, while recent mergers, billions of dollars in network upgrades and shrinking traditional business temper any upside.
"To a great degree the market is already discounting the major challenges the wireline sector faces," said Goldman Sachs analyst Jason Armstrong in a research note.
Sunday, July 17, 2005
Wireless not free of risks
A shiny new laptop computer can be had for as little as $500, lightning-fast DSL Internet service has dropped to $14.95 a month and a wireless router costs $50 or less.
Welcome to the golden age of wireless, where every day, thousands of average Joes and Janes are making that cordless leap onto the information superhighway.
At least 13.2 million U.S. households will have wireless home networks by the end of 2005, up from 9.1 million in 2004, according to IDC Research, a tech analyst based in Massachusetts.
A broadband connection coupled with a wireless router allows consumers to set up a home office at the dining-room table or outside by the pool. But that cordless convenience could carry a heavy price.
Roughly two out of every three wireless signals are left unencrypted, according to Internet security experts, which means anyone with a laptop and a $20 wireless card could tap into an unsecured signal to surf Web sites or check e-mail.
Some might take it further.
A small subset of computer-savvy hackers has the know-how and gadgets for more nefarious activities. Through an open wireless connection, a criminally minded hacker could commit virtual identity theft by accessing your computer files, sending spam, stealing your credit-card numbers, even trading child pornography.
Even worse, whoever owns the wireless network could be held liable, said Sacramento County, Calif., Sheriff's Lt. Bob Lozito of the Sacramento Valley Hi-Tech Crimes Task Force. "If they're doing these things under your identity, it comes back to you," Lozito said.
The mobile nature of these crimes makes them hard to trace.
Welcome to the golden age of wireless, where every day, thousands of average Joes and Janes are making that cordless leap onto the information superhighway.
At least 13.2 million U.S. households will have wireless home networks by the end of 2005, up from 9.1 million in 2004, according to IDC Research, a tech analyst based in Massachusetts.
A broadband connection coupled with a wireless router allows consumers to set up a home office at the dining-room table or outside by the pool. But that cordless convenience could carry a heavy price.
Roughly two out of every three wireless signals are left unencrypted, according to Internet security experts, which means anyone with a laptop and a $20 wireless card could tap into an unsecured signal to surf Web sites or check e-mail.
Some might take it further.
A small subset of computer-savvy hackers has the know-how and gadgets for more nefarious activities. Through an open wireless connection, a criminally minded hacker could commit virtual identity theft by accessing your computer files, sending spam, stealing your credit-card numbers, even trading child pornography.
Even worse, whoever owns the wireless network could be held liable, said Sacramento County, Calif., Sheriff's Lt. Bob Lozito of the Sacramento Valley Hi-Tech Crimes Task Force. "If they're doing these things under your identity, it comes back to you," Lozito said.
The mobile nature of these crimes makes them hard to trace.
Tuesday, July 12, 2005
Google Getting Current With Broadband
Investments by the search engine company and two high-powered firms deliver $100 million to Current Communications Group.
Google, along with Goldman Sachs and The Hearst Corporation, will make a significant investment in Germantown, MD-based Current, according to a Wall Street Journal report.
Current is a provider of broadband access, but delivers that access over powerlines instead of telephone or cable. The technology makes an electrical outlet in a home a source of always-on Internet connectivity. The company has managed to rollout a test of their technology last year, in partnership with Cincinnati-based utility Cinergy. The initiative offered a bundle of broadband and voice connections to Cinergy's electric customer base of 1.5 million.
The implementation of BPL would resolve the "last mile" issues faced by traditional Internet service providers of high-speed products. Telecoms in particular have been reluctant to wire rural areas, while cable frequently enjoys a monopoly presence in communities and little pricing pressure. But virtually every structure in a community has a power outlet. In response to this potential, cable and telecom companies have been very aggressive in trying to persuade state legislators to pass laws banning cities from implementing these types of solutions. Glasgow, Kentucky was one of the first cities in the nation to provide cable television and broadband access community-wide, all managed by its Electric Power Board. And in California, the three major electric utilities there responded to December criticism from Public Utility Commission head Susan Kennedy on the BPL topic by at least investigating pilot programs.
Google, along with Goldman Sachs and The Hearst Corporation, will make a significant investment in Germantown, MD-based Current, according to a Wall Street Journal report.
Current is a provider of broadband access, but delivers that access over powerlines instead of telephone or cable. The technology makes an electrical outlet in a home a source of always-on Internet connectivity. The company has managed to rollout a test of their technology last year, in partnership with Cincinnati-based utility Cinergy. The initiative offered a bundle of broadband and voice connections to Cinergy's electric customer base of 1.5 million.
The implementation of BPL would resolve the "last mile" issues faced by traditional Internet service providers of high-speed products. Telecoms in particular have been reluctant to wire rural areas, while cable frequently enjoys a monopoly presence in communities and little pricing pressure. But virtually every structure in a community has a power outlet. In response to this potential, cable and telecom companies have been very aggressive in trying to persuade state legislators to pass laws banning cities from implementing these types of solutions. Glasgow, Kentucky was one of the first cities in the nation to provide cable television and broadband access community-wide, all managed by its Electric Power Board. And in California, the three major electric utilities there responded to December criticism from Public Utility Commission head Susan Kennedy on the BPL topic by at least investigating pilot programs.
Thursday, July 07, 2005
Mickey Mouse goes wireless
Walt Disney and Sprint on Wednesday announced plans to launch a new wireless service, Disney Mobile, next year.
The service will use Sprint's nationwide PCS network and is targeted at families, the companies said. It would include wireless voice service, handsets and entertainment content.
Disney will handle product development, distribution, marketing, customer relations and billing. Under its mobile virtual network operator strategy, Sprint is working with different national brands to expand its reach beyond its traditional customer base, it said. Disney's content and applications could help it drive demand for data services.
The deal follows a similar alliance announced by the two companies last year. Sprint and Disney are working on a phone service for sports fans using content from Disney's sports channel, ESPN. Disney already offers its branded content such as graphics, ring tones and games on NTT DoCoMo in Japan.
"This enhanced mobile service offering will ensure Disney's place as a leader in the family mobile market, one of the fastest-growing segments of the mobile industry," Steve Wadsworth, president of Walt Disney Internet Group, said in a statement. "We'll be in investment mode for the next several years, but expect that over the long run this initiative will generate solid financial returns for the company."
George Grobar, formerly vice president and general manager of Disney Auctions, will serve as senior vice president and general manager of Disney Mobile, the company said.
The service will use Sprint's nationwide PCS network and is targeted at families, the companies said. It would include wireless voice service, handsets and entertainment content.
Disney will handle product development, distribution, marketing, customer relations and billing. Under its mobile virtual network operator strategy, Sprint is working with different national brands to expand its reach beyond its traditional customer base, it said. Disney's content and applications could help it drive demand for data services.
The deal follows a similar alliance announced by the two companies last year. Sprint and Disney are working on a phone service for sports fans using content from Disney's sports channel, ESPN. Disney already offers its branded content such as graphics, ring tones and games on NTT DoCoMo in Japan.
"This enhanced mobile service offering will ensure Disney's place as a leader in the family mobile market, one of the fastest-growing segments of the mobile industry," Steve Wadsworth, president of Walt Disney Internet Group, said in a statement. "We'll be in investment mode for the next several years, but expect that over the long run this initiative will generate solid financial returns for the company."
George Grobar, formerly vice president and general manager of Disney Auctions, will serve as senior vice president and general manager of Disney Mobile, the company said.
Sunday, July 03, 2005
Saturday, July 02, 2005
SBC Launches Cable Attack with $14.95 DSL
Taking a bold step, SBC Communications unveiled the most aggressive DSL pricing program yet early last month. SBC lowered the price of its SBC Yahoo! DSL Express service, which offers access speeds of up to 1.5 Mbps, to just $14.95 per month for new customers who order the service online with a one-year contract. That's one third of the price of most cable modem offerings and even cheaper than the dial-up plans of leading ISPs like America Online and EarthLink.
The promise of saving as much as $30 a month may entice plenty of cable modem subscribers to switch to SBC's DSL product. And with broadband cheaper than narrowband, dial-up customers may readily make the leap too. MSOs may gripe that SBC's pricing tactics are sheer insanity. But the Bell's moves are completely rational. Stealing customers from cable with DSL discounts is far cheaper than building new fiber networks, and it helps SBC retain phone subscribers in the face of cable's aggressive VoIP rollout.
Also on the DSL front, BellSouth Corp. intends to launch a premium service this fall that will deliver data download speeds of up to 6 Mbps. Pricing plans weren't disclosed. Known as FastAccess DSL Xtreme 6.0, the new service will be twice as fast as BellSouth's current top-line DSL product, called FastAccess DSL Xtreme. Once the new tier launches, BellSouth will feature four different levels of DSL service, with downstream speeds ranging from 256 kbps to 6 Mbps.
The promise of saving as much as $30 a month may entice plenty of cable modem subscribers to switch to SBC's DSL product. And with broadband cheaper than narrowband, dial-up customers may readily make the leap too. MSOs may gripe that SBC's pricing tactics are sheer insanity. But the Bell's moves are completely rational. Stealing customers from cable with DSL discounts is far cheaper than building new fiber networks, and it helps SBC retain phone subscribers in the face of cable's aggressive VoIP rollout.
Also on the DSL front, BellSouth Corp. intends to launch a premium service this fall that will deliver data download speeds of up to 6 Mbps. Pricing plans weren't disclosed. Known as FastAccess DSL Xtreme 6.0, the new service will be twice as fast as BellSouth's current top-line DSL product, called FastAccess DSL Xtreme. Once the new tier launches, BellSouth will feature four different levels of DSL service, with downstream speeds ranging from 256 kbps to 6 Mbps.
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