Major trends at BellSouth continued during Q2 2003: the company added DSL and long distance subscribers, lost local access line to UNE-P competitors and technology substitution, continued to cut its capital expenditures, held its operational costs steady, and further reduced its debt. Service bundling is leading to better retention and reacquisition of residential and small business customers. Some specifics of the quarterly report include the following
- Q2 revenue was $5.6 billion, compared to $5.8 billion in Q2 2002.
BellSouth added 103,000 net DSL customers in Q2 for a total of 1.2 million at quarter-end. BellSouth began offering tiered DSL service levels this month. In Q1 2003, BellSouth added 101,000 DSL customers.
BellSouth added 856,000 net long distance customers in Q2 and now serves a total of 2.8 million customers.
BellSouth now has 2.1 million customer for its Answers consumer bundle, which has ARPU of $62.
Communications Group revenues were $4.6 billion compared to $4.7 billion in Q2 2002, a decline of 1.8%.
Total data revenues of $1.1 billion were essentially even with second quarter a year ago, and included retail data revenue growth of 11.5%, driven primarily by DSL.
Residence and business access lines served by UNE-P competitors increased 249,000 in Q2 and now exceed 2 million, an 80% increase over last year. Residential UNE lines increased sequentially by 18% while business UNE lines remained relatively flat. UNEs now account for 86% of all wholesale lines served by BellSouth. In Q1 2003, UNE-P lines served to competitors grew by 231,000. Meanwhile, BellSouth’s total access lines are down by 988,000 to 24.25 million, representing a drop of 3.9% year-over-year. The company said it remains cautious in its outlook for line loss.
Consolidated operating expenses were $4.2 billion, compared to $4.6 billion in the same quarter of 2002. Net income was $951 million compared to $263 million in the same quarter a year ago.
Operating free cash flow (defined as cash flow from operations less capital expenditures) was $1.8 billion. The company has generated over $3 billion in free cash flow this year.
CAPEX in Q2 2003 was $729 million for a total of $1.4 billion year-to-date, a reduction of 33% compared to $2.0 billion in the first half of 2002.
For Q2, the CAPEX-to-revenue ration was 13.0%. For the year to date, this ratio now stands at 12.3%.
Total debt was reduced by $1.2 billion in the quarter and now stands at $15.4 billion. Net debt is $11.3 billion.
Cingular Wireless added 540,000 net customers.
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