Broadband Buoys Small Businesses in a Down Economy.

Business Editors & Technology Writers

SAN ANTONIO--(BUSINESS WIRE)--April 30, 2002

Yankee Group study finds that SBC (NYSE:SBC) DSL Internet access

service provides small businesses invaluable productivity gains;

benefits increase over time

Once considered a luxury, DSL Internet access service has become more integral to the workings of small businesses and is viewed as a highly-valuable resource, even during tough economic times. More than 90 percent of small businesses responding to a recent Yankee Group study reported that business gains resulting from increased productivity meet or exceed the monthly cost of DSL Internet access service. Sixty-five percent of respondents agreed that, if forced to cut costs in a down economy, DSL Internet access would be one of the last services eliminated.

The survey of small business customers who use DSL Internet access from SBC Internet Services examined use of broadband, its value in day-to-day operations and specific ways in which small businesses use and benefit from DSL Internet access service.

"DSL Internet access really provides the best combination of price, speed and functionality for a small company," said Michael Lauricella, analyst for The Yankee Group. "Small businesses are increasingly realizing how greatly the high-speed of DSL Internet access service can positively impact productivity, and ultimately, the bottom line."

Improved Efficiency

Employee efficiency is the greatest benefit afforded by DSL Internet access service, followed closely by improved client service. When presented with a list of specific ways in which DSL Internet access service was positively impacting the business' bottom line:

-- Purchase goods and services online: 83 percent of those who've had DSL
Internet access service for two years or more use it to purchase goods and
services online compared to 69 percent who have had it for less than 6 months

-- Make travel reservations: 79 percent of small businesses that have had DSL
Internet access service for two years or more use it to make travel
reservations online, compared to 60 percent of those who have had it for less
than six months

-- Collaborate on electronic documents: 61 percent of SBC small business
customers who've had DSL Internet access service for two years or more
collaborate on electronic documents, compared to 40 percent of customers who've
had it for less than six months

-- Distance learning: 24 percent of those with two years or more experience
with DSL Internet access service are taking advantage of distance learning
opportunities while only 14 percent of small businesses that are relatively new
users of the service use it for distance learning

Research, e-mail, online purchasing and booking travel are key uses of broadband. The fast connection enables businesses to save time and money, contributing to overall improvements in efficiency.

-- Purchase goods and services online: 83 percent of those who've had DSL
Internet access service for two years or more use it to purchase goods and
services online compared to 69 percent who have had it for less than 6 months

-- Make travel reservations: 79 percent of small businesses that have had DSL
Internet access service for two years or more use it to make travel
reservations online, compared to 60 percent of those who have had it for less
than six months

-- Collaborate on electronic documents: 61 percent of SBC small business
customers who've had DSL Internet access service for two years or more
collaborate on electronic documents, compared to 40 percent of customers who've
had it for less than six months

-- Distance learning: 24 percent of those with two years or more experience
with DSL Internet access service are taking advantage of distance learning
opportunities while only 14 percent of small businesses that are relatively new
users of the service use it for distance learning

"It has made us more competitive. We are in the distribution market and we have found that DSL has really simplified communications between us and all of the people that we do business with," said John Akscin, an SBC Southwestern Bell customer in the pharmaceutical industry.

Increased Opportunity

Almost 50 percent of businesses surveyed believe the Internet gives their business a competitive advantage and 35 percent say that DSL Internet access service enables them to compete with larger companies. DSL Internet access service also opens the door for small businesses to interface with large corporations that require purchasing, payment and other transactions to be handled online. Survey respondents listed some of the most common uses of broadband when interacting with larger companies.

-- Purchase goods and services online: 83 percent of those who've had DSL
Internet access service for two years or more use it to purchase goods and
services online compared to 69 percent who have had it for less than 6 months

-- Make travel reservations: 79 percent of small businesses that have had DSL
Internet access service for two years or more use it to make travel
reservations online, compared to 60 percent of those who have had it for less
than six months

-- Collaborate on electronic documents: 61 percent of SBC small business
customers who've had DSL Internet access service for two years or more
collaborate on electronic documents, compared to 40 percent of customers who've
had it for less than six months

-- Distance learning: 24 percent of those with two years or more experience
with DSL Internet access service are taking advantage of distance learning
opportunities while only 14 percent of small businesses that are relatively new
users of the service use it for distance learning

"It has helped because I am a one-man operation. It lets me get my name out there so I can have a bigger presence. It lets me be more responsive to my clients. It also makes it easy to work with out-of-town clients," said George Kubas, an SBC Ameritech customer in the graphic design field.

Indefinite Possibility

The study also revealed that the longer a small business has DSL Internet access service, the more it benefits from the service, creating greater competitive advantage. Roughly 40 percent of businesses that have had DSL Internet access service for six months or less think it provides a competitive advantage, whereas among businesses that had broadband two years or more, 49 percent believe it gives them a leg-up on the competition.

-- Purchase goods and services online: 83 percent of those who've had DSL
Internet access service for two years or more use it to purchase goods and
services online compared to 69 percent who have had it for less than 6 months

-- Make travel reservations: 79 percent of small businesses that have had DSL
Internet access service for two years or more use it to make travel
reservations online, compared to 60 percent of those who have had it for less
than six months

-- Collaborate on electronic documents: 61 percent of SBC small business
customers who've had DSL Internet access service for two years or more
collaborate on electronic documents, compared to 40 percent of customers who've
had it for less than six months

-- Distance learning: 24 percent of those with two years or more experience
with DSL Internet access service are taking advantage of distance learning
opportunities while only 14 percent of small businesses that are relatively new
users of the service use it for distance learning

"It's great to see, as we enter our third year of providing DSL Internet access service, that not only are the number of subscribers growing exponentially, but they're also getting more value out of the service," said SBC executive director of small business DSL marketing Tim Salmon. "The longer businesses have a DSL Internet connection, the more important it becomes to their business processes."

The survey results of Business Broadband Watch are based on independent telephone interviews conducted by Yankee Group from a random sampling of 550 small businesses with SBC DSL Internet access service.

SBC Communications Inc. (www.sbc.com) is one of the world's leading data, voice and Internet services providers. Through its world-class network and its subsidiaries' trusted brands - SBC Southwestern Bell, SBC Ameritech, SBC Pacific Bell, SBC Nevada Bell, SBC SNET and Sterling Commerce - SBC companies provide a full range of voice, data, networking and e-business services, as well as directory advertising and publishing. A Fortune 27 company, America's leading provider of high-speed DSL Internet Access services, and one of the nation's leading Internet Service Providers, SBC companies currently serve nearly 60 million access lines nationwide. In addition, SBC owns 60 percent of America's second largest wireless company -- Cingular Wireless -- which serves more than 21 million wireless customers. Internationally, SBC has telecommunications investments in 28 countries.

The Yankee Group (www.yankeegroup.com) As a global leader in technology research and strategic consulting, the Yankee Group provides accurate, reliable, and trusted research; custom consulting; and personalized one-to-one client interaction encompassing all areas essential to business success: Internet, electronic commerce, communications, wireless, computing, and enterprise applications. Established in 1970 and headquartered in Boston, the company maintains offices throughout North America, Europe, Latin America, and the Pacific Rim.