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.
Sinclair broadcast revenue increased 3.8% to $158.3 million in the first quarter ended March 31 and operating income was up slightly to $30.4 million due to an increase in auto and political ad spending, company officials said. Sinclair also plans to reinvest an additional $7 million this year and $20 million next year on transmitter building and tower projects to improve market signal coverage and lower building maintenance and electricity expenses, officials said.
Financials: Vivendi Universal Entertainment revenue increased 3% to $1.8 billion due to strong performance from its TV and Universal Pictures businesses, company executives said. TV revenue increased 15%, with ad revenue up 14%… Spanish Bcstg. System revenue grew 4.7% to $29.2 million in the first quarter ended March 31 and operating income increased 3.8% to $10.9 million. The growth was due to double-digit revenue increases in the company’s Miami and Chicago markets and strong performance from 2 L.A. FM stations, company executives said.
MARINA DEL REY, Cal. -- The FCC and Congress should replace the 85% “trigger” on DTV household penetration with a “hard” deadline for turning off analog TV service, James Sanduski, vp-mktg., Samsung Visual Display Products Group, told an HDTV Forum opening keynote session here Wed.
Sprint reported a consolidated net loss of $498 million in its 3rd quarter, reversing year-ago net income of $519 million, and said its consolidated net operating revenue dipped 1.2% to $6.7 billion. It said the results included a charge of $768 million due primarily to a write-down on special items related to a revaluation of the company’s MMDS spectrum that lowered the asset’s carrying value to $300 million. Previous year results for the same quarter included a net gain of $260 million from special items and net income of $42 million from a discontinued operation. The FON Group said it lost $433 million after having a profit of $526 million a year earlier, and net operating revenue fell 7.3% to $3.5 billion. In its Local Div., it said revenue declined 3.2% to $1.5 billion, despite gains in bundled service customers. FON said consumer bundle penetration increased 700 basis points to more than 31% and business bundle penetration 400 basis points to 26%. The group said its DSL subscribership grew 41,000 in the quarter to 264,000, while total access lines declined at a 2.2% annual rate, compared with 2.4% in the 2nd quarter. In its Global Market Div., Sprint said net operating revenue dropped 12% to $2 billion, driven by a 15% decline in voice revenue. “Consumer revenues continued to be impacted by product substitution and aggressive competition,” the group said. The PCS Group said it widened its net loss for the quarter to $65 million from a $7 million a year earlier, but said its net operating revenue grew 5.8% to $3.3 billion. It said it had 19.3 million customers at the end of the quarter after adding 184,000 postpaid retail users, 290,000 through its wholesale channels and 22,000 through its affiliates. It said its churn was 2.7% for the quarter, compared with 2.4% sequentially, but remained lower than 3.8% a year ago. For the full year, Sprint said it expected FON operating income adjusted for special items to be $1.85 billion to $1.90 billion, up from its earlier forecast of $1.80 billion to $1.85 billion. It said it expected capital expenditures of $1.7 billion, down $100 million from its previous forecast. The company confirmed its forecast for the PCS Group, saying it was expected to report full-year operating income adjusted for special items of $800-$900 million. It said it also anticipated the group would have gross customer additions “in the low- to mid-6 million range.” Sprint revised PCS full year free cash flow to $300 million, up from its estimated $200 million due to reduced working capital requirements.
GE and Vivendi Universal on Wed. signed a formal agreement creating NBC Universal, merging the French company’s Hollywood studio, cable networks and theme parks with NBC TV business. The new venture is expected to generate roughly $13 billion in annual revenue. The terms of the final deal were largely unchanged from a preliminary agreement reached in September, when the company entered into exclusive negotiations. It gives NBC more clout to compete with bigger rivals Viacom, Disney and Time Warner, the firms said. Vivendi shareholders benefit from reduced debt while keeping a 20% of the new company. GE will control 80% of the company, which will be led by Bob Wright, vice-chmn of GE and CEO of NBC. NBC will pay $3.8 billion cash for the Vivendi Universal assets, and assume $1.7 billion of Vivendi’s debt. The deal is subject to regulatory approvals in Washington, D.C., and Brussels, but GE and Vivendi said they expect the deal to be complete by the beginning of 2004.
Emmis Communications said it had $7.5 million in net income in the 2nd quarter ended Aug. 31, reversing a $6.8 million loss a year earlier. It attributed $10 million of the turnaround to a write-off on debt reduction last year. The company also sold nearly $1 million in assets in the 2nd quarter, with no such sales a year ago. Chmn. Jeff Smulyan said: “In radio, we outperformed our markets by 4.5%, while in television we outperformed our markets by 3.8%.”