Hanging tough on cable phone

If you're a cable installer looking for a challenge, you may want to give AT&T Broadband & Internet services a call. They can use your help, particularly if you know telephony.

In its first quarter 2000 report last week, the company said it was "still on track" to have 400,000 to 500,000 subscribers signed on to receive voice service over their hybrid fiber/coax (HFC) lines by the end of the year (see story on page 16). Even the lower of those two target figures represents 10 times the number of cable phone customers AT&T BIS now has and almost three times the number served by cable phone leader Cox Communications.

Those targets will be achieved by increasing daily installation rates, said Dan Somers, president of AT&T BIS. "Our install rate for March was about 500 per day vs. 50 a day in December," he said, adding that the rate for installing cable telephony customers rose further in April to 650 per day.

As of last week, Somers said, AT&T BIS had 55,000 cable phone customers and was averaging 1000 sales of the service per day.

About 62% of AT&T BIS' cable plant now is upgraded to the point that it can provide telephony and high-speed data. Currently, 56% of the network can support two-way traffic, though that figure will hit 75% by the end of the year.

The network upgrade effort, which Somers expects to finish in 2001, will keep pace with those ambitious telephony goals for the year, he said. "Our current upgrade plans will provide us with ample inventory of homes to hit our telephony and data customer commitments this year and to have us in a scale position as we enter 2001."

Those 400,000 to 500,000 cable phone customers AT&T BIS expects by the end of this year do not include the voice subscribers that MediaOne will bring should that merger be completed this year. For first quarter 2000, MediaOne reported 94,000 telephony customers, an increase of about 42% over fourth quarter 1999.

Specifics of how AT&T BIS expects to add at least 360,000 cable phone customers in the remainder of 2000 are hard to find.

"We've been increasing the number of places where we provide phone service and increasing the competence of the installers," said an AT&T BIS spokesman. "There's a learning curve here, and that helps. We've also got some order systems in place that make it more effective and more efficient. Now it's just a question of doing the work that we have to do day to day to keep that momentum going."

That momentum will have to be pretty ballistic: to reach the 400,000 cable phone customer mark by the end of the year, AT&T BIS must average more than 1300 installations per day.

Some of those new customers could come from other people's networks, though. During the first quarter this year, AT&T signed a partnership agreement to provide cable phone service to Insight Communications' subscribers. That will add some potential local voice customers, however; the deal AT&T signed with the nation's largest cable operator, Time Warner, appears to be mired in limbo now that America Online has announced plans to merge with that multiple systems operator.

When the MediaOne merger does go through, Greg Braden, current vice president for telephony at MediaOne, will assume that post at AT&T BIS, filling the opening left by Curt Hockemeier, who left for a position with Arbinet. MediaOne, which has been offering cable telephony since 1997, can add to AT&T's corporate expertise with cable telephony, Braden said.

"We've gone through a lot of market launches and through the learning curve that comes with ramping the business up initially," he said. "There's a lot of moving parts in any [cable telephony] market entry, not only because of your internal operations but because of interdependencies with the [incumbent local exchange carriers], each of which is different. We bring to the table a bit of `been there, done that.' Coupling that learning with AT&T's brand and resources makes for a very powerful and promising combination.