AT&T Broadband margins slide


It's a good thing AT&T Corp. cut a deal to sell its cable systems, as
their margins are sliding again.

AT&T Broadband spent months bragging about how its woeful cash-flow
margins were turning around from as low as 13.7 percent in one quarter of 2000
up to 25.2 percent for the third quarter of 2001.

But in posting results for the fourth quarter ended December 2001, the MSO's
margins slid back down to 22.9 percent, a 2.3 point decline.

Most other cable operators run with cash-flow margins of 42 percent to 45

AT&T Broadband's latest margin drop doesn't even include the cost of
switching high-speed Internet customers from the bankrupt Excite@Home Corp. to
an in-house network.

If that $51 million expense were taken into account, AT&T Broadband's
margin would have been a mere 20.7 percent.

Deeper sales of Internet, digital-cable and cable-telephone services have
pushed monthly revenue to $57.73 per subscriber, up 9.4 percent from the same
period a year earlier.