RealTime IT News

AT&T Broadband to Scale Back on Orders

AT&T Broadband, a wholly owned subsidiary of AT&T Corp., is scaling back on its expansion plans due to what one vendor described as "end-of-the-year budget balancing" and has told several of its supplies to suspend shipment of pending orders.

AT&T Broadband officials said the company is merely managing to stick to the original 2000 capital budget and refuted the notion that business conditions have slowed. "Adustments at the end of the year are not an uncommon thing," AT&T Broadband spokeswoman Tracey Baumgartner said.

The decision by AT&T Broadband, the nation's largest broadband services company providing analog and digital television entertainment services to about 16 million customers, to limit shipments for the reminder of the year had a material impact on vendors such as Scientific-Atlanta and ANTEC -- enough so that many suppliers released statements on Friday regarding the company's decision.

Scientific-Atlanta Inc. said any slowdown in shipments would affect 1 to 2 percent of Scientific-Atlanta's anticipated sales. Scientific-Atlanta's business with AT&T is primarily in its Transmission business.

ANTEC Corp. said AT&T's request will materially hurt its revenue and earnings in the fourth quarter and possible next year. While it is too early to estimate the full impact of the action, ANTEC said AT&T Broadband purchases make up a significant portion of total ANTEC's sales. It said it expects to release more detailed information and updated guidance regarding the fourth quarter and full year 2001 next week.

"We are working closely with AT&T Broadband to minimize the impact of this delay in shipments, and we expect the effect mainly in the fourth quarter, with some possible overflow into early next year," said Bob Stanzione, ANTEC president and CEO.

"Conversations we have had with AT&T Broadband indicate that the delay will be short term and their commitment to phone service over cable networks remains key to their growth strategy in 2001 and beyond. Further, they have told us that our relationship as a strategic vendor will remain strong, and we expect that our overall level of business with them to continue to grow over the next year. With all of this in mind, we expect that 2001 will be another year of growth of hybrid fiber coax networks worldwide," he said.

Meanwhile, Commscope Inc. reduced its sales and earnings growth projections for 2001 "to the mid-teen range" from the 20 percent previously stated. The maker of equipment used for high-speed telecommunications networks stood by fourth-quarter earnings projections despite a decision by AT&T Broadband.