Emmis Communications revenue increased 11% to $169 million and operating income grew 24% to $48.5 million in the 3rd quarter ended Nov. 30. Radio revenue increased 3% due to raising rates while optimizing the amount of inventory the company sells, Emmis said. TV revenue increased 24% largely due to an increase in political ads. International radio revenue and operating income were $4 million and $3.8 million, respectively.
Cable companies are planning to increase rates in 2005 about the same percentage as last year, but many hikes will exceed the annual 3.2% inflation rate, according to our spot check of the largest MSOs. Although companies said they're offering more services and higher quality along with price hikes, consumer groups are disgruntled with the pace of increases and packaging of high-end service.
DSL hit the 85.3 million global subscriber mark, growing more than 39% in 2004, according to industry analyst Point Topic. It said DSL added 24 million subscribers the first 9 months of this year, with more than 500,000 users signing up globally each week. In N. America, DSL gained almost 3.5 million subscribers in the 3rd quarter, to 15.1 million total at the end of Sept., the study said. It said the U.S. added 3.2 million, reaching 12.6 million DSL-enabled phone lines and raising DSL’s broadband market share 3.8%. In Canada, DSL has 48% market share after adding 120,000 subscribers in the quarter, it said. The study said Latin America was now emerging as a DSL market, adding 1.2 million subscribers the first 9 months of 2004, more than 72% growth. It said Brazil was leading the way, gaining over 620,000 DSL subscribers, and Mexico, Argentina and Peru had more than 50% growth this year. DSL Forum Pres. Tom Starr said he expected “DSL subscribers will have passed the 100 million subscriber milestone [by Feb.]… That will mean 10% of the world’s phone lines are delivering [high-speed Internet] to people in every region.”
Integral Systems reported its highest quarterly revenue in company history on Dec. 6. Financial results for the satellite software maker’s 4th quarter of 2004 were $25.1 million, up from $23.7 million in the 4th quarter of 2003. Operating income decreased slightly to $3.6 million for the current quarter, versus $3.8 in the same quarter in 2003. Net income was down to $2.4 million from $2.5 million last year.
Russian Mobile TeleSystems said its 3rd-quarter revenue grew 50% to $1.1 billion from a year earlier, as its net income jumped 117% to $338 million. It said the results were driven by “significant expansion” of its subscriber base, as it added 3.8 million new customers in the quarter, to a total of 28.85 million.
Qwest agreed to pay $250 million to settle securities fraud charges, the Securities & Exchange Commission said Thurs. The company settled without admitting or denying the allegations. The SEC has been investigating whether Qwest inflated revenue by incorrectly booking network capacity deals to improve the company’s image with Wall St. in 1999-2002. The agency charged Qwest “fraudulently recognized over $3.8 billion in revenue and excluded $231 million in expense as part of a multi-faceted fraudulent scheme to meet optimistic and unsupportable revenue and earnings projections.” The SEC said the payment would be distributed to investors. Qwest also will be required to permanently maintain a chief compliance officer reporting to a committee of outside directors and responsible for making sure the company “conducts its business in compliance with the federal securities laws.” Randall Fons, dir. of the SEC’s central regional office in Denver, said “Qwest senior management created a corrupt corporate culture in which meeting Wall Street expectations was paramount.” Qwest Chmn. Richard Notebaert said the settlement concludes a 2-1/2 year investigation of the company and “will now allow us to focus even more of our effort to provide exceptional value and service to customers.” Company management turned over in 2002.
AT&T Wireless announced late Mon. it has agreed to sell its share of Rogers Wireless to Rogers Communications for $1.38 billion. AWE had been hoping to sell its stake as part of its merger with Cingular. Earlier, AWE turned down a $1.15 billion offer from Rogers, which is Canada’s 2nd largest wireless carrier with 3.8 million customers. “For several years, we've been focused on identifying and monetizing non-strategic assets, at the right value, to fund growth in our core wireless business,” said John Zeglis, AT&T Wireless chmn. “During this period, we have sold minority investments in Taiwan, Indonesia, the Czech Republic, and other countries. The sale of our interest in Rogers is simply another step in our execution of this long-term plan.” AT&T Corp. bought its share from British Telecom in 1999. AT&T Wireless took over that interest when it was spun off 2 years later.
Verizon reported 2nd quarter earnings of $1.8 billion vs. $338 million a year earlier, saying the results were driven by 25% growth of Verizon Wireless revenue and 6% growth of top-line consolidated revenue over the same period. It said its consolidated operating revenue grew to $17.8 billion from $16.8 billion a year ago. Growth businesses such as wireless, data and broadband accounted for 52% of Verizon’s 2nd-quarter revenue, compared with 46% of the revenue last year. The company also said it was “on track” for $1 billion in annual cost savings from a voluntary retirement program at the end of last year. Verizon said its wireless revenue jumped 25% to $6.8 billion 2nd quarter from a year earlier -- the 8th consecutive quarter of double- digit, year-over-year wireless revenue increases. The company added 1.5 million net new customers, saying that was “the largest quarterly customer increase in the history of the company,” formed in April 2000. Total customers grew 17% year-over-year to 40.4 million. Verizon said its average monthly service revenue per customer increased 3% to $50.80 and was “at an all-time high for the company,” and its churn reached a record low 1.45%. Verizon CFO Doreen Toben told analysts during the conference call the company’s churn “could trend up slightly during the remainder of the year” based on a historical pattern that 2nd-quarter churn is the lowest of the year. Verizon said its domestic telecom operating revenue fell 3% to $9.6 billion. It said the 2nd- quarter results included a 15% increase in revenue from all long-distance services, which was $1 billion, and a 6% increase in total data revenue, which was $1.9 billion. It said its total of more than 2.9 million DSL lines at the end of the quarter represented 53% year-over-year growth. Taking into account the retroactive long-distance line adjustment to correct database errors in response to an inquiry by the SEC, the company had 16.8 million long-distance lines in service at the end of the quarter, a 21% year-over-year increase. But Verizon said its total access lines declined 4.2% to 54.4 million, with residential lines down 4.4% and business lines 3.8% compared to last year. Toben said on a sequential basis, Verizon lost 519,000 residential lines in the quarter, reflecting “expected seasonality having to do with college disconnects.” She said Verizon also lost an additional 155,000 business lines, which she said was “a steady” but “modest improvement over previous quarters.” Toben said net additional UNEs in the quarter were 425,000, the “lowest level in a number of quarters.” Toben said while waiting for the FCC to release interim UNE rules, “we now have some hope that there will be some positive corrective action taken on the unbundling issue and the era of ongoing price reduction in this area may have come to an end.”
Cingular and AT&T Wireless turned over to the FCC late last week hundreds of pages of documents responding to a June 30 request for information on the companies’ proposed merger. In another merger development, Rogers Communications announced that the deadline expired at midnight Sun. for AT&T Wireless to sell its 34% in Rogers Wireless.
Market research firm In-Stat/MDR projected that the overall worldwide value of PC-TV tuner products and digital TV set-top boxes will grow to more than $3.8 billion in 2008. PC-TV turners permit consumers to tune in TV programs to capture, store and manage a wide range of video content on their PCs. In-Stat also predicted that the PC-TV tuner market will evolve to include PC-TV tuner products built into motherboards. Europe will continue to be the leader in analog tuners and set-top boxes, while Asia runs a close second, In-Stat said.