Financial Performance:
Southern New England Telephone, a subsidiary of SBC Communications, Inc.
The difficulties in evaluating the relative success or failure of a company in the telecommunications industry, or any government-regulated service, such as telephone service, are numerous. How does one evaluate the overall success of the company, in relation to financial and legal difficulties, even to outright failures of its subsidiaries on a local level? Also, how does one unravel the legal snarls that plague the communications industry in a climate that often fluctuates from state to local ordinances? "Pity the Regulator," wrote The Economist in 1997, when the Internet and communications snarl was just beginning to grip the nation and the world. However, when writing the recent history of Southern New England Telephone, one might want to extend pity to this subsidiary of SBC as well.
Over the course of the last several financial quarters, there has been a steady downturn in the growth of Southern New England Telephone. Its parent company's stock, SBC, has also fallen in the last several quarters. Yet, according to the SBC's most recently issued third quarterly financial statement to its investors and shareholders, the company has reported its seventh straight quarter of DSL growth. (SBC Investor Report, October 2003). Furthermore, SBC still ranks as one of Fortune Magazine's top thirty companies because of its status as America's leading provider of high-speed DSL Internet Access Transport services and one of the nation's leading Internet Service Providers. Why have Southern New England Telephone and SBC declined, despite the fact that SBC companies currently serve 55 million access lines nationwide? SBC has great name recognition as well. After all, SBC companies own 60% of America's second-largest wireless company, Cingular Wireless. Cingular, besides being a buzzword brand name in the industry, serves more than 24 million wireless customers. Internationally, SBC companies have telecommunications...
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