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January 24, 1997updated 05 Sep 2016 12:45pm

AT&T FINDS IT HARD TO COLLECT ON UNPAID PHONE BILLS

By CBR Staff Writer

Highlight of AT&T Corp’s fourth quarter results was a lowlight: there was a surprise – or even shock – $200m increase in uncollectible revenues in the quarter – and the company blamed the new headache on the era of competition. It used to be if you don’t pay your phone bill you didn’t get phone service. Now with multiple suppliers, we can shut off their service, but they can go someplace else to get service, chief financial officer Richard Miller told Reuters. The problem is worst among business users, particularly the hundreds of tiny long-distance resellers, some of whom go bankrupt after ordering millions of network minutes from carriers like AT&T, MCI Communications Corp and Sprint Corp in order to compete with them. AT&T’s fourth-quarter operating net per share was three cents below the 79 cents industry analysts had forecast, according to First Call, mainly on the extra $200m in provisions for bad debts. Miller said results for the first quarter of 1997 would be comparable or slightly above those of the fourth quarter. Still, AT&T had a record year in 1996 in the face of extraordinary challenges and unprecedented changes in our business and in our industry, said chairman Robert Allen. The company is very different from the one that reported a year ago, because it has shed Lucent Technologies Inc, NCR Corp and AT&T Capital Corp. AT&T said its communications services revenue increased $529m in the latest quarter, up 4.3% from the same period last year. Long-distance calling volumes grew 6% over the same period in 1995 and 1.8% over the previous quarter. AT&T’s wireless services revenue, which includes cellular voice and data, messaging and air-to-ground services, grew 18.4% to $937m in the fourth quarter; its cellular service subscribers grew to 5.2m, up 31.7% on a year ago. The AT&T- Unisource Communications venture linking the company with Unisource NV sees huge revenue from its Internet services by the end of 2000. The conservative estimate is $540m Internet sales by year-end 2000, AT&T-Unisource Communications Internet access services manager Erik Neraal said, while in the US, AT&T’s head of its Worldnet Internet access service said the company had seen the number of its new subscribers double so far in the month of January, adding that many of its new subscribers are frustrated America Online Inc users.

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