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U-verse Picks Up the Pace

Raymond McConville
TelcoTV News Analysis
Raymond McConville
9/5/2007
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AT&T Inc. (NYSE: T) says it's just signed its 100,000th customer to the U-verse fiber-to-the-node TV service. (See U-Verse Hits 100K.)

That's a nice pickup for a service that struggled out of the gate with rollout delays, cost miscalculations, and a mere 3,000 subscribers to speak of at the end of 2006. (See AT&T Lowers U-verse Goals Again and AT&T Hits Lowered U-verse Goal.)

U-verse ended the first quarter of 2007 with 13,000 subscribers. Customers nearly quadrupled to 51,000 by the end of the second quarter and have nearly doubled again since.

UBS AG analyst John Hodulik thinks the fourth quarter will be even bigger. "We had projected that 4Q will be a big quarter for U-verse, with over 100K new installs. With over 80K in 3Q, this could prove conservative," he writes in a research note today.

This recent success should "eliminate overhang from speculation regarding [any] DISH acquisition and FTTH strategy change," Hodulik writes.

AT&T expects to be installing U-verse in 10,000 homes per week by the end of this year, which would represent roughly 120,000 new subscribers per quarter. Based on today's milestone and some quick long division, the company is doing roughly 6,250 installations per week since the end of the second quarter, which would give it about 125,000 subscribers by the end of the third quarter.

AT&T spokesman Wes Warnock says the company is still "absolutely on track" to reach its goal of 10,000 adds per week this year.

By comparison, FiOS TV from Verizon Communications Inc. (NYSE: VZ) had 515,000 subscribers at the end of the second quarter.

In addition to the milestone announcement, AT&T unveiled some interactive features that will become available later this month, including customized weather, stock, traffic, and sports information; a yellowpages.com plug-in; and Yahoo Games on the TV screen.

AT&T has talked about other interactive features such as the whole-home DVR, sharing content across three screens, and viewing your Yahoo photos on your TV.

U-verse runs on AT&T's IPTV infrastructure. Verizon is running FiOS TV as a digital cable-like RF service but has announced plans to move everything over to IPTV. (See Verizon: HD VOD Is Coming.)

— Raymond McConville, Reporter, Light Reading

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rbrand@nortelnetworks
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rbrand@nortelnetworks,
User Rank: Light Beer
12/5/2012 | 3:03:11 PM
re: U-verse Picks Up the Pace
Glad to see that LightSpeed is accelerating its deployment. But Ray, you need to compare apples and apples. While you report SBC/ATT's numbers for uVerse connections as 100K to FiOS TV at 515K, those are not necessarily the same services. According to wikipedia (http://en.wikipedia.org/wiki/U... u-verse is a group of offered services which may include video while FiOS TV is definitely a video service along with Internet etc. The Verizon FiOS only connects exceed 1000K. And what is the ATT retention rate for TV? If you subscribe to the uVerse users group, there is still a lot of dissatisfaction over HDTV quality on VDSL2. This same generic issue came up in the last DSL Forum BoF session.
Raymond McConville
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Raymond McConville,
User Rank: Light Beer
12/5/2012 | 3:03:10 PM
re: U-verse Picks Up the Pace
I am comparing apples to apples. The AT&T announcement indicates that the company has signed up 100K U-Verse TV customers.

Dissatisfaction over HDTV quality on VDSL2 is a completely different story but you're absolutely right about the concern. AT&T will have to rely on advances in compression technology to continue to deliver more HD content. So far, it sounds like they're doing okay, but we'll see how long that continues.

I dont know what the retention rate is for U-Verse TV, but I imagine with most customers likely locked into to at least a year long contract, it'd be very low regardless of their satisfaction with the service.
Ben Crosby
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Ben Crosby,
User Rank: Light Beer
12/5/2012 | 3:03:06 PM
re: U-verse Picks Up the Pace
One minor catch Ray, I'm guessing that when you say "it'd be very low regardless"... in your third para, you mean that the churn rate would be low, and the retention rate would be high ?

Also in terms of apples-to-apples, you have provided subscriber counts for FIOS and IPTV.

I noted from uverse.att.com that the U200, U300 and U400 services all come with 3 "receivers" or IP STBs per subscriber. Since FIOS is more traditional overlay TV, I assume the receiver count is a little more difficult to obtain.

Inferring from public information the fact that there may be as many as 300k STBs deployed on U-verse is worthy of note.

Cheers !
Raymond McConville
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Raymond McConville,
User Rank: Light Beer
12/5/2012 | 3:03:02 PM
re: U-verse Picks Up the Pace
Yes, I did in fact mean that churn rate would be low. This is what happens when things that I write go up on the site without being copy edited.
rjmcmahon
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rjmcmahon,
User Rank: Light Beer
12/5/2012 | 3:03:01 PM
re: U-verse Picks Up the Pace
My neighbors are getting u-verse TV service. It looks like it's good enough for them.
Raymond McConville
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Raymond McConville,
User Rank: Light Beer
12/5/2012 | 3:03:00 PM
re: U-verse Picks Up the Pace
Well then I guess that settles the argument
rjmcmahon
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rjmcmahon,
User Rank: Light Beer
12/5/2012 | 3:02:59 PM
re: U-verse Picks Up the Pace
Well then I guess that settles the argument

I assume that's some sarcasm. ;-)

It makes the point that building out yet another broadcast network will only satisfy the neighbors. It won't be any good for the rest of us but T and the neighbors will argue it's more than good enough. (Maybe the neighbors should be able to choose my furniture as well as the digital consumer electronic devices I'm allowed to use?)

Or better yet let's figure out how to build new networks that support unicast at modern bandwidth capabilities. Neither FiOS nor U-verse need apply as these technologies and business models are a waste of everyone's time.
mgardner750
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mgardner750,
User Rank: Light Beer
12/5/2012 | 3:02:58 PM
re: U-verse Picks Up the Pace
I've had U-verse through a FTTH connection for 2 months and am about ready to switch back to satellite for TV.

The TV service is like subscribing to a beta service that has glitches. The DVR resets itself at least once a day taking 5 minutes to get back where you can watch TV. The DVR software by Microsoft can best be described as bug free as Vista and as user friendly as DOS 1.0 is to MAC OS X. Why they donG«÷t do the little things like putting shows into folder instead of having a list of 100 shows to slowly page through is beyond me. Simple things that TVIO does so well are missing.

The picture quality is very good on SD but they compress the HD too much for football. You get blocking on the images.

The service has a lot of potential, but if they donG«÷t get the DVR to stop resetting, I will switch.
Raymond McConville
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Raymond McConville,
User Rank: Light Beer
12/5/2012 | 3:02:58 PM
re: U-verse Picks Up the Pace
Yes, sarcasm is in fact my second language.

Are you saying that there's no way T's IP network or VZ's (when they eventually move everything over to IP) can support unicast?
Raymond McConville
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Raymond McConville,
User Rank: Light Beer
12/5/2012 | 3:02:58 PM
re: U-verse Picks Up the Pace
I assume you live in a greenfield community then if you're on FTTH. You'd have to assume that they're going to work through some of the software glitches as it is a first generation service and bugs are inevitable. That is interesting though that you say the picture quality on HD is bad for football, (half the reason to have HD in the first place) especially given that you're on a FTTH connection.

I'd never pay for satellite TV though. We have it here in the office and every time it rains, we have problems with the picture.
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