AT&T now has 10 million U-verse Internet subscribers!

AT&T has surpassed the 10 million-subscriber mark for its U-verse broadband service, the telecom said Friday. U-verse customers composed 60% of AT&T’s wireline high-speed Internet base as of Sept. 30, compared with 43% a year earlier. The telecom cited Project Velocity IP, its multibillion-dollar effort to complete its fiber-optic and wireless platform, as a major factor in the surge in U-verse subscribers.

AT&T, which ended the third quarter with 9.7 million U-verse broadband customers, attributed part of its growth spurt to Project Velocity IP, its multi-billion dollar, three-year capital infusion to build out its Long Term Evolution (LTE) wireless network and its U-verse platform. According to AT&T, it has added about 2.5 million broadband customer locations since announcing the initiative about a year ago. The plan calls for AT&T to expand its IP broadband reach to about 57 million customer locations by the end of 2015.

“This latest milestone shows how U-verse is helping transform AT&T into a premier IP broadband company,”
said Lori Lee, senior executive vice president, AT&T Home Solutions.

AT&T is ramping up U-verse speeds, offering up to 45 Mbps (downstream) in 79 markets, with plans to ratchet speeds to 75 Mbps and 100 Mbps later. The new 45-meg tier, called U-verse High Speed Internet Power, carries an introductory price of $49.95 per month, putting it almost on par with the cost of the 6-Meg Elite tier, which costs $46 per month. Following the introductory offer period, the Power tier will be offered at $76 per month.

U-verse broadband has helped AT&T counterbalance losses of traditional DSL customers. While AT&T U-verse high-speed Internet subs continues to climb, the telco still lost 26,000 net broadband subs in the third quarter when DSL losses were factored in.

Note that customers may still be able to get U-Verse Internet access (called IP DSLAM), even when U-verse TV service is not available in that customer serving area.

The latest U-verse gains by AT&T come as US cable operators are beginning to experience a slowdown in their long-heady broadband growth. In a report issued by MoffettNathanson Research last week, senior analyst Craig Moffett found that cable operators are signing up substantially fewer high-speed data subscribers this year and taking less market share than they did before.

Moffett noted that cable operators accounted for 78 percent of the new broadband subscribers in the third quarter, down from an amazing 99 percent the year before. So, although cable is still taking the lion’s share of new broadband customers, he wrote, “it is doing so at a much more modest pace.” He also noted that two of the five largest MSOs, Time Warner Cable Inc. (NYSE: TWC) and Cablevision Systems Corp. (NYSE: CVC), reported unexpected broadband customer losses in the summer quarter while most major telecoms registered strong sub gains.