Growth in long distance and DSL, as well as improving retail access line trends, were the top positive trends reported by SBC Communications for Q4 2003. However, SBC's revenues and net income fell during the quarter and during the full 2003 overall. Revenues for Q4 totaled $10.1 billion, compared with $11.2 billion in the year-earlier period. For the full year 2003, revenues were $40.8 billion, compared with $43.1 billion in 2002. Net income for Q4 was $905 million, or $0.27 per diluted share, compared with $2.4 billion, or $0.71 per diluted share in Q4 of 2002.
Some highlights of the quarterly report:
- a gain of 2.9 million long distance lines companywide, including 1.7 million from Midwest launch, giving SBC a total of 14.4 million LD customers at year end.
- a gain of 377,000 DSL lines, marking the 8th consecutive quarter of accelerated DSL growth, giving the company a total of 3.5 million DSL customers, up 60% from fourth-quarter 2002 levels. For comparison, in Q3 2003 the company added 365,000 net DSL customers. SBC hopes to have 5 million DSL customers by year-end 2004. The DSL network currently reaches 75% of SBC customers and the company expects to reach 80% by year end 2004.
- a loss of 243,00 consumer primary access lines, marking the smallest sequential decline in nine quarters. SBC attributed the trend to its entrance in the LD market in the Midwest. For comparison, SBC lost 671,000 consumer primary access lines in Q4 2002.
- a gain of 120,000 wholesale lines (resale and UNE-P), down 63% from the increase in wholesale lines last quarter. SBC said its expects to benefit from a ruling early this year by Indiana regulators that increases by $3.57 per line the wholesale rate that competitor resellers in that state must pay SBC to lease its network.
- a 9.3% rise in quarterly data revenues by 9.3% to $2.6 billion, SBC's best year-over-year growth in more than two years. Data revenues represented 29% of SBC's total wireline revenues in the quarter. For the full year, SBC's data revenues totaled $10.2 billion, up 5.3% from 2002.
- a gain of 642,000 Cingular Wireless lines, ending the year with a total of 24 million. In addition to its ongoing GSM network conversion and the pending acquisition of additional spectrum, Cingular is launching a major construction and engineering effort to add cell sites, further strengthening its nationwide network. The company also launched a major customer service initiative during the quarter.
- Retail penetration of consumer bundles that combine local voice access with at least one other service grew to 44%, roughly double the penetration rate at the beginning of the year.
- For 2004, SBC's capital expenditures are expected to be $5.0 billion to $5.5 billion, excluding Cingular Wireless capital outlays - in line with 2003 spending. Cingular Wireless' capital spending is expected to be consistent with its 2003 total of $3.4 billion.
