BellSouth, Dell ink DSL deal

BellSouth, the third-largest local telephone company in the U.S., said yesterday it signed an agreement with Dell Computer to provide high-speed DSL Internet access to its residential customers. Terms of the deal were not disclosed.

As part of the deal, computers come with a pre-installed DSL modem and software to allow self-installation. Both consumers and providers alike have experienced difficulties providing customers with fast, easy DSL service. The plug-and-play characteristic of the BellSouth-Dell package is designed to circumvent these problems.

“Consumers and businesses increasingly are buying computers specifically to go online, and this agreement will make it easier for BellSouth customers to get to the Internet within minutes of setting up their new Dell computer,” said John Hamlin, vice president and general manager, in a statement.

The companies will jointly market the offer to customers in the Atlanta-based BellSouth’s service area, which includes nine southeastern states. BellSouth said the offer would be available in the second quarter 2001.

A BellSouth spokesman said the company’s partnership with Dell is based largely on its reputation as an industry leader.

“It’s an opportunity to work with a strong company to provide a great product,” he said. “We’re really confident this will provide a good user experience.”

Current BellSouth DSL users pay $39.95 or $49.95, depending on the package purchased. A spokesman said the company had not yet determined a price structure for the joint offer.

In January, the nation’s leading DSL provider, SBC Communications, rolled out a similar promotion with Compaq and ISP Prodigy. SBC customers who purchase a DSL-equipped Compaq computer at a reduced rate are eligible to receive DSL service via Prodigy for $49.95 per month.

Separately, BellSouth reiterated its 2001 outlook in a meeting with analysts and in a Securities and Exchange Commission filing yesterday. The announcement repeated numbers the company announced nearly two months ago.

BellSouth said it expects earnings per share to increase 7% to 9% with capital expenditures of $5.5 billion to $6 billion. Furthermore, it anticipates 30% data-revenue growth and hopes to have 600,000 DSL customers by the end of the year.

As the telecom sector continues to crumble, analysts welcomed the company’s unchanged guidance figures.

“No news is good news,” said Credit Suisse First Boston analyst Dan Reingold in a research report.