Contrary to a missive by DSL Reports last year (http://www.dslreports.com/shownews/ATTs-Stankey-Uverse-Build-Virtually-Over-114279), AT&T is not cutting back it’s U-Verse deployments. This summer, U-Verse was installed throughout Santa Clara, Fremont, CA and most of the SF Bay Area. Today, Jefferies & Company analyst George Notter came out with a report stating that AT&T is considering expanding its U-verse buildout by offering high-speed broadband to some of the 18 million copper access lines in the U.S. that don’t yet have high speed broadband yet. Mr. Notter points out that the remaining 18 million access lines are “scattered over 80 percent of AT&T’s geographic footprint.”
Notter writes that AT&T is discussing this internally and should make a decision within weeks. The venerable carrier has an analyst day scheduled for Nov. 7, so it’s possible the U-Verse expansion news will be announced during that event. It would probably take 12 to 18 months, equipment-vendor sources told Notter.
In this potential U-Verse builout, approximately 3 million to 5 million households would get FTTN (Fiber to the Node with short VDSL copper loops) in a U-verse expansion, Notter estimates. While the first 30 million-line U-Verse deployment concentrated on fairly densely populated metro and urban areas, a further buildout would be to more remote (unserved or underserved) geographical areas.
Alcatel-Lucent (ALU) provided the fiber-to-the-node gear for the original U-verse deployment and would be the likely choice for this rumored expansion, Notter writes. The FTTN business wouldn’t be huge for ALU — about $110 million to $190 million in DSLAM equipment, Notter estimates.
In its latest earnings report (2Q-2012), AT&T said it had 6.8 million total U-verse® subscribers (TV and high speed Internet) in service. U-verse TV subscribers grew 22 percent year over year, according to the company.
“U-verse Revenues Up 38 Percent. Revenues from residential customers totaled $5.5 billion, an increase of 1.7 percent versus the second quarter a year ago — their strongest growth in more than four years. Continued strong growth in consumer IP data services in the second quarter more than offset lower revenues from voice and legacy products. The second quarter marked the eighth consecutive quarter of year-over-year growth in wireline consumer revenues. U-verse continues to drive a transformation in wireline consumer, reflected by the fact that consumer broadband, video and voice over IP revenues now represent 57 percent of wireline consumer revenues, up from 50 percent in the year-earlier quarter. Increased AT&T U-verse penetration and a significant number of subscribers on triple- or quad-play options drove 18.2 percent year-over-year growth in IP revenues from residential customers (broadband, U-verse TV and U-verse Voice) and 6.2 percent sequential growth. U-verse revenues grew 38.3 percent compared with the year-ago second quarter and were up 10.2 percent versus the first quarter of 2012.
U-verse Subscribers Near 7 Million Mark. Total AT&T U-verse subscribers (TV and high speed Internet) reached 6.8 million in the second quarter. AT&T U-verse TV added 155,000 subscribers to reach 4.1 million in service. AT&T U-verse High Speed Internet delivered a second-quarter net gain of 553,000 subscribers to reach a total of 6.5 million, helping offset losses from DSL. Overall, AT&T wireline broadband connections decreased 96,000, partly due to seasonality. More than 50 percent of U-verse broadband subscribers have a plan delivering speeds up to 12 Mbps or higher, up from 39 percent in the year-ago quarter. About 90 percent of new U-verse TV customers took AT&T U-verse High Speed Internet in the second quarter and about half of new subscribers took AT&T U-verse Voice. About three-fourths of AT&T U-verse TV subscribers have a triple- or quad-play option from AT&T. ARPU for U-verse triple-play customers was about $170, up slightly year over year. U-verse TV penetration of eligible living units continues to grow and was at 17.3 percent in the second quarter.”
In the last week, AT&T announced two new ways it is augmenting its U-Verse offerings via “TV Everywhere” (e.g. on mobile devices) and Second Screen apps (using the screen of a mobile device for various applications that enhance the TV viewing experience).
1. In its first “TV Everywhere” offering, AT&T has partnered with Viacom to add several Viacom channels to its U-verse TV online offerings on selected websites. With the AT&T U-verse ID, AT&T customers will now get to view the full-length episodes from BET, Comedy Central, MTV, Nickelodeon, Spike and VH1 on demand through Viacom’s network-based websites like www.mtv.tve. Also, customers will soon get the access to these services on their mobile devices including smartphones and tablets.
2. In a presentation at last Thursday’s TVNEXT Conference in Santa Clara, CA, AT&T’s Lee Culver said that AT&T is working with third parties and also developing its own “second screen” mobile apps for iOS compatible devices (Apple iPhones and iPADs). Article covering that topic is at:
Stay Tuned: We are synthesizing the results of a comprehensive market survey of AT&T U-Verse subscribers and will be summarizing those plus providing selected anonymous quotes in a forthcoming article!
Related article on Verizon’s FiOS streaming video plans is at:
More articles at: http://viodi.com/author/alanweissberger