Long distance and DSL revenue growth offset access line declines at BellSouth during 2003, holding the company's communications revenues nearly flat at $18.4 billion compared to 2002. For Q4, BellSouth reported consolidated Q4 revenues of $5.7 billion, an increase of 0.9% compared to the same quarter of the previous year. Net income was $787 million compared to $574 million in the same quarter a year ago. Operating free cash flow totaled $5.3 billion for the full year. Over the last seven quarters, the company has increased its quarterly dividend 31.6% to 25 cents per common share. Some additional highlights:
- CAPEX: Capital expenditures for 2003 were $3.2 billion, a reduction of 15.5% compared to 2002. The 2003 CAPEX to revenue ratio was 14.2%. For reference, CAPEX in 2001 peaked at $6.0 billion and the CAPEX to revenue ratio was in the mid-20s.
- Debt: Total debt at December 31, 2003 was $15.0 billion, a reduction of $2.4 billion since the first of the year.
- Service Bundling: In Q4, BellSouth Answers packages increased to more than 3 million, which represents a 24% penetration of primary access lines. Answers combines customers' local, long distance, Internet and wireless services all on one bill. BellSouth Unlimited Answers contributed to the growth in package customers with subscribers exceeding 1 million at the end of fourth quarter. Unlimited Answers allows customers to call anywhere in the United States anytime for a flat monthly fee.
- Long Distance: BellSouth added approximately 3 million long distance customers during 2003, for a total of 3.96 million customers and almost 30% penetration of its mass-market customers by year-end. During Q4, about 40% of new customers included international long distance in their calling plans.
- DSL: BellSouth added 126,000 net DSL customers in Q4, bringing its end of year total subscribers to 1.46 million.
- Data: Led by DSL, data revenues of $1.1 billion grew 4.0% in Q4 2003 compared to the same quarter of 2002. DS1 and DS3 circuits continue to account for about 60% of BellSouth's wholesale data revenues. In Q4, DS1 units grew 1.3% and DS3 circuits were flat.
- Access lines: Total access lines of 23.7 million at December 31 declined 3.6% compared to a year earlier, impacted by the economy, competition and technology substitution. Residence and business access lines served by BellSouth competitors under UNE-P increased by 199,000 in Q4.
- Domestic Wireless: Cingular Wireless added 642,000 net cellular/PCS customers in Q4, ending the year with more than 24 million cellular/PCS customers.By the end of 2003, the company's GSM/GPRS network was available to 93% of its potential customers and with approximately 57% of subscriber minutes traveling on this upgraded network.
