Leaving Verizon FiOS in its dust, AT&T U-verse continued to maintain a breakneck growth pace in the second quarter, albeit at a somewhat slower rate than in previous quarters.
AT&T Inc. (NYSE: T) reported late Wednesday that it signed up another 190,000 subscribers for U-verse TV in the second quarter. That's down from its gains of 201,000 TV subs in the first quarter and 233,000 in the same period a year ago. But it's still far more than the 100,000 new FiOS video subs that Verizon Communications Inc. (NYSE: VZ) reported a day earlier and stands in stark contrast to the video subscriber losses that most US MSOs are still experiencing.
Thanks to this latest increase, AT&T now has 5.9 million U-verse TV customers, widening its lead over Verizon's similar fiber-fed FiOS platform, which closed out the spring quarter with 5.4 million video customers. The large telco also has significantly more video subs than every US cable operator except the two industry leaders, Comcast Corp. (Nasdaq: CMCSA, CMCSK) and Time Warner Cable Inc. (NYSE: TWC).
Likewise, AT&T enjoyed another healthy quarter on the broadband side, signing up an impressive 488,000 high-speed data subscribers for its U-verse Internet service. Once again, that total is down from the whopping 634,000 U-verse Internet customers it added in the first quarter and the 641,000 it added a year ago, but it still dwarfs the 139,000 that FiOS Internet added in the winter quarter.
With this increase, AT&T now has 11.5 million U-verse Internet customers, easily more than FiOS Internet's 9.1 million total. AT&T also has more broadband subscribers than every cable operator besides Comcast, even though the telco's total wireline broadband sub count actually fell by 55,000 because of its continued huge losses on the DSL end.
On their earnings call, AT&T executives bragged that U-verse now accounts for 70% of their broadband sub base, up from 55% a year ago and 40% two years ago. They also highlighted the fact that U-verse now generates 62% of the company's consumer wireline revenues, up from 51% a year ago.
With U-verse's video and broadband penetration rates now at about 20%, much lower than FiOS's penetration rates of a smaller base, AT&T officials expressed confidence that they can still push their subscriber totals significantly higher. "We have plenty of room to grow," said AT&T CFO John Stephens. "We believe we can achieve much more."
Stephens offered no new updates on their plans to deliver gigabit speeds throughout the US with their new "U-verse with GigaPower" initiative service. AT&T, which is now rolling out a slower, 300Mbit/s version of GigaPower in Austin, Texas, intends to expand next to Dallas and several North Carolina cities. (See AT&T's Austin GigaPower Debuts at 300 Mbit/s .)
On a separate note, Stephens did provide an update on AT&T's plans to buy DirecTV Group Inc. (NYSE: DTV). He said the regulatory approvals for the buyout are proceeding smoothly so far, with Brazil's antitrust regulator and three states reviewing the merger -- Arizona, Louisiana, and Hawaii -- all signing off on the deal without imposing any conditions. Stephens said AT&T officials are working closely with various regulatory agencies to consummate the deal and "are more excited and confident about it than ever."
— Alan Breznick, Cable/Video Practice Leader, Light Reading