SBC Communications expects to see its wireline revenue stabilize and then return to growth by the end of 2004, said Edward E. Whitacre Jr., SBC Chairman and CEO, at a company-sponsored conference. The company is hoping to save $1.3 billion in annual expenses by 2006 by further trimming its capital expenditures and improving its overall productivity. Some major trends underway at SBC include:
- the company is on-track to launch a bundled SBC DISH TV video service in early 2004. SBC will have pricing flexibility in launching the service and will be able to control the customer relationship. SBC also plans to add interactive features through the TV set-top box.
- SBC is expecting continued growth in DSL net adds in 2004. The company currently has 3.1 million DSL users. SBC estimates that more than 50% of DSL locations passed today are capable of 4-6 Mbps service.
- SBC's consumer growth strategy will continue to focus on service bundling. Adding long distance to an access line reduces the company's churn rate by 9%. Churn drops by 61% when a DSL line is added to an SBC bundle. Together, long distance and DSL reduce churn by 73%.
- Cingular Wireless' national GSM/GPRS network conversion is ahead of schedule and 92% complete across the company's existing geographic footprint. Currently, 40% of Cingular customers have GSM- enabled handsets.
- SBC's consumer retail long distance penetration is expected to reach more than 40% company wide by year end 2004.
- SBC is updating and standardizing systems at its call centers and network service centers over the next two years to improve customer service, simplify operations and increase productivity. SBC is reducing its number of call centers by about one-third by standardizing technologies and processes. And in SBC network center operations, the company expects to substantially reduce its roughly 500 locations - down from 600 a year and a half ago.
- SBC will continue to expand its national data network in 2004 as it pushes enterprise services into new markets. The SBC IP backbone and out-of-region networks - which reach more than 30 major metropolitan markets outside the company's traditional service area - are up and running now.
- Strong access-line performance in the Midwest - similar to trends in the Southwest and West following long distance launches.
- CAPEX for 2004 will be approximately $5 billion, excluding Cingular.
