AT&T Broadband shakes suppliers

AT&T Broadband gave its suppliers a post-Thanksgiving bone to choke on when it said Friday it would suspend purchases of equipment used to upgrade cable TV systems for phone service.

The order delays will run through the end of December as the MSO straightens up inventory stockpiles. Similar delays date back to the days when AT&T Broadband was Tele-Communications Inc. (TCI) and had notoriously inefficient inventory management that nearly every year resulted in a product surplus and a delivery halt. Normal deliveries are expected to resume in the first quarter of next year, said AT&T Broadband spokesman Steve Lang.

"We want to make sure that our capital budget and our capital spending line up," said Lang.

The news hit some of the MSO's vendors hard. Antec and CommScope shares fell more than 20 percent after both said 2001 profit may be hurt. Others, including Scientific-Atlanta, C-Cor.net and Harmonic also said they would feel varying degrees of pain, with S-A stating that the delay would trim between 1 and 2 percent off its current quarter sales and Harmonic predicting a $2 million to $3 million quarterly revenue reduction.

"It's affecting all the vendors," said Lang, emphasizing that the delay is not a result of a slowdown in AT&T's cable television business. "We have enough inventory to meet our needs for the rest of the year."