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SBC Communications Inc. (NYSE: SBC)
175 E. Houston, P.O. Box 2933
San Antonio, Tex. 78299-2933
(210) 821-4105
Chairman and CEO: Edward E. Whitacre Jr.
Revenues (FYE December 31, 1998): $28.777 billion
Net Income (FYE December 31, 1998): $4.023 billion
Market Capitalization: $166.9 billion
Employees: 203,000
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Business New Haven
1/10/2000
By: Kristine Hansen
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Just about everyone living in Connecticut is familiar with the name Southern New England Telephone (SNET). The company has provided phone service to residents for generations. Not so familiar to local residents is the parent company for this Connecticut icon, SBC Communications Inc., which acquired SNET in 1998.
SBC Communications was formerly Southwestern Bell Corp., created at the 1984 breakup of AT&T. The company operated under the Southwestern Bell name until 1995, when it changed its name to SBC Communications. Its initial market area served the south and west including the states of Arkansas, Kansas, Missouri, Oklahoma and Texas. But before long this would become only a small part of the company's reach.
In the 1980s SBC embarked on an acquisitions spree that set the stage for nationwide and worldwide penetration. Among its deals was the 1987 acquisition of Metromedia , which enabled the company to acquire and then provide wireless service outside its original market area. The service operated under the Cellular One name in the Baltimore, Boston, Chicago and Washington, D.C. metro areas. Later it expanded to upstate New York and central Illinois. By 1999, SBC had more than million U.S. wireless customers.
The 1990s also proved to be a decade of even stronger acquisition activity for the company as well. It acquired interests in both Telefonos de Mexico and Telekom South Africa. In 1997, SBC acquired Pacific Telesis and followed the next year with the SNET acquisition. In 1999 SBC also acquired Comcast Cellular (which added the market areas of Delaware, New Jersey and Philadelphia), Cellular Communications of Puerto Rico Inc., and merged with Ameritech.
The spoils of such acquisitions have given SBC a presence on both coasts as well as a slice of the southwest and Midwest - and a worldwide presence in markets in Europe, Africa and the Far East. Its brand names include Ameritech, Cellular One, Nevada Bell, Pacific Bell, Security Link, SNET and Southwestern Bell.
Through its main wireline subsidiaries the company provides traditional landline telecommunications service for local, long distance and network access, and also offers internet and message services. The company's wireless business provides local and long distance wireless service and also sells traditional and wireless related equipment. Its directory businesses sell advertising and publish white and yellow pages.
For the year ended December 31, 1998, SBC's balance sheet showed assets of more than $45 billion. Total operating revenues for the year were $28.8 billion, with net income of $4.0 billion ($2.05 per diluted share).
For the nine months ended September 30, 1999, the company reported pro-forma combined operating revenues (for SBC and Ameritech, acquired in October) of $36.6 billion, and net income of $5.1 billion ($1.46 per diluted share. The company incurred a one-time $883 million charge in the third quarter due to the Ameritech merger and reported an after-tax gain of $219 million from sale of certain businesses.
The stock has traded between a 52-week low of 44 1/16 and high of 59 15/16. It closed on December 27 at 48 15/16. The majority of analyst recommendations indicate strong or moderate buy (with a few indicating hold). Average earnings estimates for the 1999 year come in at $2.24 per share and for the year 2000 at $2.40 per share.
The development of partnerships has been a part of the company's history, and recent years shows a continuation of that strategy. In 1999, SBC entered into a long-term deal with Williams Communications, giving SBC to access Williams' broadband network.
Also, SBC has partnered with companies such as America Online, IBM, Compaq Computer, PeopleSoft and, more recently, Prodigy. As a result of the Ameritech acquisition, SBC launched its Project Pronto, an ambitious plan to bring high-speed Digital Subscriber Line (DSL) service to more than 80 percent of its customer base.
Under the SBC flag, SNET has become a part of a family of communications companies that reaches from the west to the east and around the world either by wireline or wireless communication.
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