@Home Networks, the California-based provider of high-speed internet access and content services, says it expects to make a profit some time in 1999. The company, 39% owned by Tele- Communications Inc which last month agreed to be acquired by AT&T (CI No 3,439), this week reported a second quarter net loss of $11.1m, down 6.4% on revenues of $9.2m compared to $1m the year before. A spokesperson for @Home said the company was hopeful for the future and while he couldn’t give a precise date, he said @Home expected to break even and get into the black some time during 1999. The company’s expectations are shared by Wall Street analysts who expect @Home to break even by the second quarter 1999 and to make a profit, equivalent to earnings of $0.03, by the third quarter. The company also announced an increase in subscriber levels, up 63% from the 90,000 users reported on March 31, to 147,000. The number of upgraded homes – homes that have two way data transmission as opposed to just one-way – has also increased to 7.9 million, while the ISP’s distribution reach has expanded to 60 million homes worldwide, largely thanks to the addition of ten new cable affiliates during the quarter. We’ve now got 18 cable affiliates worldwide but we need to make those companies upgrade their last mile so that the cable can handle two-way data transmission. We see that as the fastest and most economic way to provide data services. He added that @Home plans to make other deals, with some of the more numerous, smaller cable companies. Of the 7.9 million upgraded homes, he said it was now @Home’s job to try to market their services and gradually turn them into subscribers. He dismissed as not that big a deal concerns that @Home was running out of ready cash. The company reported $13.7m in cash and cash equivalents for the second quarter, down 68% on last year’s $44.2m. We did spend a lot of cash rolling out services and making improvements to our infrastructure, he said, but look at the investment, we now have 26 datacenters, where most ISPs just have one or two, and we’re extending our reach everyday. We’re very hopeful for our future. He added that it was still too early to speculate on any relationship between @Home and AT&T, especially given that approval of AT&T’s takeover of TCI is still nine to 12 months away.
