Fitch: Bundling Strategies Leading to Stable Consumer Wireline Revenues for U.S. ILECs

Business Wire,  June 5, 2008  

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CHICAGO -- Despite ongoing access line losses among the leading incumbent local exchange carriers (ILECs), the service bundling strategy has clearly stabilized consumer revenues and positions the ILECs to generate modest consumer revenue growth, according to a Fitch Ratings special report published June 4, 2008. During the first quarter of 2008 the RBOCs lost approximately 2.237 million access lines, however the year over year change in consumer wireline revenues at Verizon Communications, Inc., AT&T, Inc. and Qwest Communications International, Inc. were 0.9%, -0.4%, and, -0.7% respectively. Meanwhile the effects of aggressive marketing contributed to healthy revenue generating unit (RGUs) gains during the first quarter of 2008 among the top cable multiple system operators. The leading cable MSOs added approximately 1.9 million revenue generating units during the first quarter of 2008 reflecting a 650,000 sequential improvement.

Trends identifying the scope and depth of the competitive overlap of leading telecommunications operators can be found in Fitch's U.S. Communications Industry Leaders Competitive Scorecard special report for the first quarter of 2008. The report compares the competitive positions of the leading local exchange carriers (LEC), cable multiple system operators (MSOs), wireless service providers and direct broadcast satellite (DBS) operators. The report summarizes key operating metrics financial statistics, particularly related to key forecast items such as revenue growth, margin changes, capital re-investment and debt. Additionally, the report includes summary comments concerning key developments in the quarter.

The quarterly report can be found at www.fitchratings.com by clicking on 'Corporates' under the 'Corporate Finance' header and then clicking on 'Special Reports' once in the 'Corporates' Home Page.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.

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