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DSL, wireless to fuel strong new year, Verizon chief vows

President and co-chief executive Ivan Seidenberg tells analysts to expect solid fourth-quarter and 8 percent to 10 percent growth in 2001 revenues.

Verizon Communications executives believe the local phone giant should have no difficulty meeting its fourth-quarter earnings estimates and financial expectations for the new year, even if the economy performs poorly in 2001, Wall Street analysts were told Monday.

Verizon president and co-chief executive Ivan Seidenberg predicted 2001 revenue growth of 8 percent to 10 percent in a speech at a Salomon Smith Barney conference in Scottsdale, Ariz.

"Our growth engines--data, DSL, long-distance, wireless--are strong enough to accelerate our overall growth rate, even in the face of an economic downturn," Seidenberg said in a statement.

Seidenberg said Verizon should make earnings of 71 cents per share for the first quarter and $3.14 for the year, as forecast by First Call. The company also expects to meet or exceed key operating targets for fourth-quarter and full-year 2000. Verizon is expected to report fourth-quarter earnings Feb. 1.

Baby Bell local phone companies often are more stable in economic downturns because their core business, local phone traffic, "is not a service consumers are likely to turn from" even in hard times, said Jupiter Research analyst Joe Laszlo.

Seidenberg said Verizon had 540,000 DSL customers at the end of the year, up from 350,000 on Sept. 30, 2000, and more than the 500,000 the company had aimed for. The company had $6.2 billion in data revenue in 2000, with the fourth quarter proving to be the 12th consecutive quarter of at least 30 percent growth in data revenue.

Verizon recently increased its 2001 and 2002 earnings estimates after announcing it would no longer acquire digital subscriber line (DSL) provider NorthPoint Communications.

Verizon Wireless--a combination of Verizon Communications and Vodafone--had 27.5 million subscribers on Dec. 31, up 16 percent over the previous year, with about 750,000 wireless data subscribers. Operating in 49 states, Verizon Wireless had 2000 revenues of $15 billion, Seidenberg said.

Another area of growth included long-distance, Seidenberg said, where the company won 20 percent of the New York market in one year. He said the company plans to resubmit to the Federal Communications Commission "shortly" its application to provide long-distance in Massachusetts.

Verizon's largest revenue area continues to be domestic local phone service, which had $43 billion in revenues last year. However, Seidenberg predicted wireless would be a larger revenue generator for Verizon by 2003.

Seidenberg said the company saved $535 million as a result of cost savings stemming from the merger of Bell Atlantic and GTE, which created Verizon. The company hopes to save $2 billion by 2003 as a result of the merger, he said.