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AT&T Stands By U-verse Projections

Phil Harvey
3/1/2007
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Has AT&T Inc. (NYSE: T) cut the number of homes it expects to pass this year with the network powering its U-verse service?

Nope. But media reports this morning mistook a breakout of the carrier's 2007 buildout plans as a huge disruption in the U-verse space/time continuum.

Ma Bell CFO Rick Linder, during the company's conference call Jan. 25, gave a breakdown of where the company is in its U-verse goal. "We will expand our build to pass 8 million living units by the end of this year," he said. He also noted: "We're working now on a few final adjustments to the software and video infrastructure, and then we will begin ramping the product launch." (See AT&T Reports Healthy Q4.)

Several articles and blog posts this morning described the 8 million figure as a "new goal" for a new year. AT&T spokeswoman Destiny Belknap says that's not accurate. "Our goal of passing 19 million living units by 2008 hasn't changed," she says.

What Linder revealed, though, is that in 2007 AT&T is aiming to pass 8 million homes, apartments, etc., so it will tackle about 42 percent of its goal in the next several months.

Of course, Linder's comments have attracted attention because AT&T's U-verse rollout is under constant scrutiny and because the carrier has moved the goalposts in the past.

Table 1: Project Lightspeed/U-verse Projection Tracker

Date Homes Passed Goal Time Projected
Nov-04 18 million By 2007
Feb-05 19 million By 2007
Mar-05 18 million By 2007
Dec-05 18 million First half of 2008
Feb-06 18 million End of 2008
May-06 19 million End of 2008
Mar-07 19 million End of 2008, with 8 million passed in 2007 alone
Source: Light Reading reports and SBC/AT&T public statements


In 2004, back when the new AT&T was still the old SBC, the company's initial talk about its Project Lightspeed network, the network U-verse runs on, had the carrier hitting 18 million households by 2007.

In early 2005, the company upped the ante to say it would reach 19 million homes by the end of 2007. By the end of March 2005, it quickly ratcheted that figure back down to 18 million homes passed by 2007. (See Give or Take a Million.)

In December 2005, public statements show the company's goal began to tiptoe out a few months. At that time, the company said it would reach "approximately 18 million households by the first half of 2008 as part of initial deployment."

In February 2006, the first half of 2008 suddenly seemed a bit brash. "AT&T is deploying a two-way, interactive, switched IP video network and extending approximately 40,000 miles of new fiber optics to initially reach 18 million households by the end of 2008," the company said in a press release.

By May 2006, the carrier was standing by its end-of-2008 timeline, but this time it added another million homes to the goal. "AT&T plans to spend approximately $4.6 billion on its Project Lightspeed initiative to reach nearly 19 million homes by year-end 2008 as part of its initial deployment," the company said in a press release.

For the record, it appears the carrier has been singing the same hymn since early 2006: 19 million homes (well, "living units") passed by the end of 2008. And that goal still hasn't changed.

What did change, toward the end of 2006, was the carrier's stance on how many markets it would occupy with Project Lightspeed and its associated U-verse services. In December, AT&T moved back -- and hit -- its goal regarding the number of markets its U-verse service would appear in. (See AT&T Hits Lowered U-verse Goal).

Table 2: Project Lightspeed/U-verse Market Watcher
Date Project Lightspeed/U-verse Event
25-Jul-06 AT&T says it will offer U-verse services in 15 to 20 markets by the end of 2006.
23-Oct-06 AT&T backs off on its U-verse goal slightly, saying now it expects to launch services in "approximately 15 markets" by the end of 2006.
21-Dec-06 In its announcement regarding the launch of U-verse services in the Bay Area, AT&T again lowers its goal. The release states: "AT&T now expects to launch AT&T U-verse in eleven markets by the end of the year, with plans to launch in additional markets in early 2007."
28-Dec-06 AT&T clears its lowered hurdle with the launch of U-verse services in four Indiana cities: Indianapolis, Anderson, Muncie, and Bloomington.
Source: AT&T press releases and Light Reading reports


CFO Linder's other notes about U-verse from the company's conference call included more praise for the often derided fiber-to-the-node architecture. "We've now launched U-verse service in 11 markets; all of these markets have HDTV. Our fiber-to-the-node architecture is performing well," he said. "Bandwidth delivered to homes is as good as, or better than, originally forecast."

He also noted that 70 percent of the customers who sign up take high-end video packages, and 70 percent of the customers are taking AT&T's highest offered broadband speed, which is only 6 Mbit/s.

— Phil Harvey, Managing Editor, Light Reading

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DCITDave
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DCITDave,
User Rank: Light Beer
12/5/2012 | 3:13:29 PM
re: AT&T Stands By U-verse Projections
Here are a few of the outlets we refer to in the article above (that got the story wrong):

USA Today:
http://www.usatoday.com/money/...

Broadband Reports:
http://www.dslreports.com/show...

TMC's VOIP Blog:
http://blog.tmcnet.com/blog/to...

DCITDave
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DCITDave,
User Rank: Light Beer
12/5/2012 | 3:13:28 PM
re: AT&T Stands By U-verse Projections
Another oops! This one from a Jupiter analyst:

http://weblogs.jupiterresearch...
rjmcmahon
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rjmcmahon,
User Rank: Light Beer
12/5/2012 | 3:13:23 PM
re: AT&T Stands By U-verse Projections
All these numbers are farcical. LR staff trying to add legitimacy to them strains its credibility. An accountant from Arthur Anderson working for Skilling at Enron is more likely to be believed, and look where that got them.
paolo.franzoi
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paolo.franzoi,
User Rank: Light Sabre
12/5/2012 | 3:13:21 PM
re: AT&T Stands By U-verse Projections

rj,

Which numbers are you concerned that LR is validating? All the numbers are sourced by AT&T and you can certainly choose to believe they are not accurate. As far as I can tell, the story is around the rollout changes over time and the public perception of those.

seven
DCITDave
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DCITDave,
User Rank: Light Beer
12/5/2012 | 3:13:20 PM
re: AT&T Stands By U-verse Projections
We're just tracking public statements, hoss.

I wouldn't bet on whether they make any of the goals set forth in their public statements.

But we can, and should, point out when other folks are putting words in Ma Bell's big mouth.

ph
rjmcmahon
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rjmcmahon,
User Rank: Light Beer
12/5/2012 | 3:13:19 PM
re: AT&T Stands By U-verse Projections
We're just tracking public statements, hoss.

Right, just "tracking" AT&T press releases without any analysis is about all a journalist can afford to do these days I guess.

I wouldn't bet on whether they make any of the goals set forth in their public statements.

What makes you think AT&T won't meet their goals? What are the implications if they don't? Does AT&T know they won't hit these goals? If so, why are they making these misleading statements?

But we can, and should, point out when other folks are putting words in Ma Bell's big mouth.

By "parroting" AT&T's public statements and discrediting their skeptics (even if they have the numbers wrong) gives the impression you are acting on behalf of AT&T.

You can and should also report that AT&T u-verse is pretty much a farce and so are the homes passed numbers. Go to the following web site and try to buy it.

http://tinyurl.com/2n5krr
paolo.franzoi
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paolo.franzoi,
User Rank: Light Sabre
12/5/2012 | 3:13:18 PM
re: AT&T Stands By U-verse Projections

Since they have not announced any actuals yet, how do you declare any of them a farce? Everyone has their doubts about the 8M homes passed, but we won't get a shot at that until 1Q is reported.

I consider the service a farce and have said so, but consumers will be the ultimate test. And they, have yet to speak.

seven
rjmcmahon
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rjmcmahon,
User Rank: Light Beer
12/5/2012 | 3:13:17 PM
re: AT&T Stands By U-verse Projections
I am a FIOS subscriber and the service is as good or better than the Comcast service that is my local alternative. Is that the feedback you were fishing for?

Why didn't you buy DBS? Do you know the take rate in your block?

Let's say I gave you $5000 with the caveat you had to sink the money into either a 1Gbs link to a peering center or into the facilities for yet another TV provider, which would you choose?
Jeff Boyardi
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Jeff Boyardi,
User Rank: Light Beer
12/5/2012 | 3:13:17 PM
re: AT&T Stands By U-verse Projections
I am a FIOS subscriber and the service is as good or better than the Comcast service that is my local alternative. Is that the feedback you were fishing for?
rjmcmahon
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rjmcmahon,
User Rank: Light Beer
12/5/2012 | 3:13:17 PM
re: AT&T Stands By U-verse Projections
Since they have not announced any actuals yet, how do you declare any of them a farce?

Let's see. According to them, the last big obstacle to investment was local governments. Now that's gone AT&T won't publicly announce real numbers that they can be held accountable by but instead announce pro forma homes passed numbers which are meaningless. They put up a web site that looks like you can order a product but when a user actually tries to buy the product, the web site presents a "learn more" button that circles back to the home page. In their user forum one finds converstations by the company employees and nothing by any real customers.

And the bigger issue is that NOBODY WANTS TELCO TV anyway. U-verse. FIOS. Different dog. Neither hunt. All just a waste of everyone's time and effort.
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