AT&T Readjusts U-verse Forecast

In a regulatory filing with the Securities and Exchange Commission (SEC) today, AT&T Inc. (NYSE: T) has once again reiterated: This fiber-to-the-node (FTTN) stuff is hard to predict. The company, in its filing, said it will spend about $500 million more to reach 1 million fewer homes by the end of 2008 than was originally projected.

"The changes reflect a shift in costs and resources to cover the planned deployment of U-verse services in the Southeast," says an AT&T spokesman. "AT&T projects an increase of approximately $500 million to its previously reported costs, bringing the total spend for 2007 and 2008 to between $4.5 billion and $5 billion.

"This new investment largely represents startup costs in the Southeast, including new video hub offices and other back-end systems," the AT&T man explains. "These investments do not immediately result in more new homes passed, so the company now plans to pass approximately 17 million homes by the end of 2008, with significant expansion planned in the following years."

The carrier says it'll have a more comprehensive update on those plans at its Analyst Conference on December 11.

This is the third time this year AT&T has changed its homes-passed estimates for U-verse, a reminder that it's never easy to predict what's never been done. Most recently, it lowered the homes passed estimates by a million back in May, due to delays in receiving equipment from vendors and difficulties securing video franchises. (See AT&T Lowers U-verse Goals Again.)

Table 1: AT&T U-Verse Projection History
Date Homes Passed Goal Time Projected
04-Nov 18 million By 2007
05-Feb 19 million By 2007
05-Mar 18 million By 2007
05-Dec 18 million First half of 2008
06-Feb 18 million End of 2008
06-May 19 million End of 2008
07-Mar 19 million End of 2008, with 8 million passed in 2007 alone
07-May 18 million End of 2008
07-Nov 17 million End of 2008
Source: AT&T, Light Reading

While the homes-passed mark for U-verse has slipped, AT&T has expanded the territory in which it plans to make the service available. During its first-quarter earnings call, it first announced it would be rolling out U-verse in the Southeast, the former BellSouth territory. (See AT&T Rings Up Big Revenues in Q1.) AT&T adds that it plans to significantly expand the service beyond 2008.

— Raymond McConville, Reporter, and Phil Harvey, Managing Editor, Light Reading

Be the first to post a comment regarding this story.
Sign In