SBC Communications Inc. today reported third quarter earnings of $1.8 billion, compared with $2.1 billion in the third quarter of 2001.
Third-quarter revenues - together with proportionate revenues from Cingular Wireless, the nationwide wireless company that is 60 percent owned by SBC - were $12.8 billion, compared with $13.5 billion in the year-ago period.
Edward E. Whitacre Jr., SBC’s chairman and CEO, used the quarterly announcement as another opportunity to critize UNE-P rules. "Our results continue to reflect the destructive effects of UNE-P pricing in some states, as well as continued economic softness and increased competition including technology substitution," he said. "We continue to respond aggressively by reducing costs. But no amount of cost-cutting can offset the effects of rules that require us to sell our lines and related services to competitors below cost.” In the third quarter, SBC lost 751,000 retail lines to competitors using UNE-P lines, primarily to AT&T and WorldCom. Competitors have now obtained more than 4.2 million UNE-P lines from SBC, with more than one-third of those lines being added in the second and third quarters of 2002.
"Despite a tough regulatory and economic environment, we delivered exceptional results adding DSL Internet subscribers, primarily as a result of effective marketing initiatives and the introduction of SBC Yahoo! DSL service," Whitacre noted. The company added 226,000 DSL Internet subscribers during the third quarter, bringing its total to 1.95 million, up 65 percent from year-ago levels. During the third quarter, SBC and Yahoo! launched SBC Yahoo! DSL, a broadband Internet service featuring personalization, rich content and various other services.
Also this quarter SBC added 318,000 long-distance lines, increasing its total to 5.9 million - up 28 percent from a year ago. SBC says it expects to gain regulatory approvals to offer long-distance service in California - the nation's largest long-distance market - by year's end and in the five SBC Ameritech states in 2003; but regulators there have been resistent.
As for other SBC-related metrics, Cingular Wireless ended the quarter with 22.1 million subscribers, an increase of 3.7 percent over the same period last year; SBC’s data transport revenues increased 3.3 percent from the prior-year period; and cash operating expenses before special items decreased 3 percent, marking the fourth consecutive quarter with a year-over-year decline.
