U-verse Subscribers and Revenues Jump in 2nd Quarter
AT&T is now the eighth-largest pay-TV provider in the U.S. after netting 202,000 U-verse subscribers in the second quarter for a total of 3.4 million. The vemerable U.S. carrier gained 439,000 U-verse broadband subs from a year ago. That’s an increase of up 36% from one year ago! Impressively, U-verse revenue jumped 57% from a year earlier.
“U-verse has transformed our consumer business,” said Chief Financial Officer John Stephens.
Author’s Note: AT&T’s total video subscribers, which include U-verse TV and bundled satellite customers (AT&T resells Dish Network), reached 5.26 million at the end of the reported quarter (representing 21.5% of households served). By contrast, Verizon had 3.7 million FiOS TV customers at the end of March, 2011, according to its first-quarter earnings release. This will be updated soon when VZ releases their 2nd Quarter earnings report.
AT&T said it lost 451,000 traditional DSL customers (that mostly have ADSL + POTS service- like this author).
Author’s Comment: It appears AT&T has no plans to retain old DSL subs, but instead to convert them to U-verse based high speed Internet when it is available in their area.
Sanford C. Bernstein analyst Craig Moffett said AT&T’s quarterly U-verse net additions were “not far from consensus [expectations] of 199,000 in what is traditionally a seasonally soft quarter.” Barclays Capital analyst James Ratcliffe also said the gains were in line with expectations.
Miller Tabak analyst David Joyce had predicted 220,000 U-verse TV user additions, but the actual result didn’t make him change his predictions for overall pay TV subscriber growth in the latest quarter.
Joyce projects industry-wide net adds of 97,000 in the second quarter driven by gains for AT&T and Verizon (+170,000), as well as satellite TV firms DirecTV (+100,000) and Dish Network (+50,000). But he once again expects cable operators to post subscriber losses, which he estimates at 317,000 for publicly traded and 443,000 for privately held companies.
The user growth he expects would make for the third consecutive quarter of pay TV subscriber increases after two quarters of declines last year kicked off a debate over whether some consumers may be dropping their cable packages to substitute them with online video options.
San Francisco Residents to get U-verse
AT&T can offer U-verse in areas where the city/ municipality permits it, the copper lines are good enough for high speed DSL transmission, and the video server can be placed close enough to the homes being served.
Three years after its initial proposal, the San Francisco Board of Supervisors voted 6 to 5 on July 19th to let AT&T deploy its U-Verse TV and broadband Internet service. AT&T got clearance to install hundreds of utility boxes (AKA cabinets) on city sidewalks and alleyways without first having to undergo a lengthy and costly environmental analysis. The metal cabinets, which measure 4 feet tall, 4 feet wide and 2 feet deep, will house telecommunications equipment for the U-Verse triple play service bundle, which can include Internet access at speeds up to 26M bps (bits per second) along with digital TV and VoIP (voice over IP). The cabinets that AT&T wants to install are much larger than its existing boxes in the city. Neighborhood activists had complained that the cabinets would block sidewalks, attract graffiti and clash with the dense scale and historic character of some of San Francisco’s communities.
While AT&T now has environmental clearance to install up to 726 boxes, the company said it would put in no more than 495 without going back to the Board of Supervisors for permission to install more of those boxes in the future.
The cabinets are used to interconnect AT&T’s fiber network with copper wires that go the rest of the way to individual homes. The carrier will still have to get approval for each box, but won’t have to undergo a study of the total impact of the equipment on the city’s environment.
“This decision means we’re finally going to be able to bring competition and choice to San Francisco,” said Marc Blakeman, AT&T regional vice president.
Let’s see how quickly AT&T moves to deploy it in the city.
Observation and Comment on U-verse
For quite some time, we’ve been waiting for U-verse to come to Santa Clara County. It would break the monopoly Comcast now enjoys on pay TV and higher speed Internet service. In many condo’s in Santa Clara (including the one I own), we can’t put satellite dishes on the roof. In other cases, heavy tree covered homes don’t have a direct line of sight for a satellite dish. So anyone who wants to watch live sports, must buy digital cable from Comcast, since there are very few games broadcast on free over the air digital TV these days. Even the MLB final league championship playoff games were on TBS and not free TV!
One of our very active IEEE ComSocSCV Discussion list members had U-verse installed in Los Altos, CA last year. He says he is very happy with the service, despite some initial outages after installation. A close companion of this author recently had U-verse installed in her Santa Clara apartment and it worked great right out of the box! Her TV reception was crystal clear with a larger choice of channels than available with Comcast Digital Cable for the same price.
This author is quite anxious to try U-verse, but we’re a bit worried about AT&T customer servcice, which has been less than stellar for DSL and even POTS. Initial calls for service are outsourced to India and it generally takes a long time to resolve any technical problem. We wonder if U-verse customer service will be handled differently than traditional DSL and POTS. We certainly hope so!
U-verse References (by this author)
1. Increased Video traffic necessitates AT&T to cap DSL Internet + U-Verse
2. A Perspective of Triple Play Services: AT&T U-Verse vs Verizon FiOS vs Comcast Xfinity
3. AT&T’s U-verse Build-Out Over by Year end (Source: DSL Reports)
Addendum: In its July 22, 2011 earnings announcement, Verizon reported it had added 189,000 FiOS Internet and 184,000 FiOS TV customers.