Although its growth pace is clearly slowing down on an annualized basis, AT&T U-verse is continuing to make great strides against cable operators, Verizon FiOS and other US pay-TV providers -- and it's aiming to do more.
AT&T Inc. (NYSE: T) reported last week that it signed up another 216,000 subscribers for U-verse TV in the third quarter. While that's up from the 190,000 TV subs it picked up in the second quarter and the 201,000 TV subs it added in the first quarter, it's down from the 265,000 video customers it signed up in the year-ago period.
Yet even with the slower pace, AT&T put more distance between U-verse and Verizon Communications Inc. (NYSE: VZ)'s comparable FiOS platform, which added a relatively paltry 114,000 video subscribers in the summer quarter. As a result, U-verse now has nearly 6.1 million TV subs, as opposed to 5.5 million for FiOS. U-verse also has more pay-TV subs than all US cable operators except for the two biggest, Comcast Corp. (Nasdaq: CMCSA, CMCSK) and Time Warner Cable Inc. (NYSE: TWC).
Likewise, on the broadband side, AT&T enjoyed a weaker, but still very solid, quarter. It signed up 601,000 U-verse high-speed data subscribers, down from the whopping 655,000 it picked up a year ago, but still among its strongest quarterly gains ever. It's also far more than the 162,000 Internet subs that FiOS gained in the third quarter.
With that increase, U-verse now boasts 12.1 million broadband customers, or 73% of AT&T's total wireline broadband base. Overall, though, the company added just 38,000 wireline broadband subs, as most of the U-verse gains came from converting over its DSL customers.
Thanks to these latest gains, U-verse TV's penetration rate is now nearly 22% of homes marketed, while U-verse Broadband's penetration rate is now 24% of homes marketed. Plus, almost two-thirds of U-verse TV subs take three or four services from AT&T.
Unlike Verizon, AT&T is still expanding U-verse's fiber footprint. So between that expansion and today's relatively low penetration rates of its two prime U-verse services, the carrier is looking for continued strong growth in quarters to come.
In addition, AT&T is counting on help from the accelerating rollout of GigaPower, its new 1Gbit/s broadband service. On the earnings call last week, company officials said GigaBlast has now launched in three major Texas cities -- Austin, Dallas and Fort Worth. Plans call for expanding service to 14 markets, including Atlanta, Chicago, Houston and Miami. (See AT&T's Austin GigaPower Debuts at 300 Mbit/s and AT&T Grows Gigabit Goals.)
— Alan Breznick, Cable/Video Practice Leader, Light Reading
Re: One Proposed Change Hi Phil, yes the deception is rampant. I avoided it by insisting that AT&T install a separate drop for UVerse. I have DSL service for my business and I wasn't going to change it for them. By doing that, it didin't disrupt anything...I only installed TV not internet. I think that the average person shops for price with double or triple play and doesn't really care. Those of us who know better, well we know better.
You're right, though AT&T isn't the only culprit of encouraging this type of misperception. Satellite and cable providers alike omit various items to make the service seem better than it is until one signs on the dotted line. I almost signed up for a U-verse type service with my cable provider, but luckily the tech warned me when he came for installation that installing the wireless reception and DVR sharing would disrupt the router and computer network configuration I had in place and would likely mean slower Internet speed on the computer. But no such warning was provided when I asked several questions about the service before scheduling the expected installation. When I found out the problem, I balked. But how many people would have found out too late?
Re: One Proposed Change Hi seven, I get the FIOS counter example but I am putting it in the thought process of consumers and marketers versus techies. I think about how the door to door guys are marketing Uverse and connecting it to their fiber. So yes, technically it is NOT a fiber play but to the minds of most consumers it is. That is what AT&T is counting on, not the rest of us who know differently.
Re: One Proposed Change Then cable's hybrid/fiber coax (HFC) - optics to the node - architecture is also a 'fiber play of sorts.' Uverse is deeper fiber, aiming to get within about 1/2 mile of the home.
Re: One Proposed Change Technically you are correct @seven but from another point of view, Uverse is inextricably linked to AT&T's fiber roll-out so it becomes a fiber play of sorts. Yes it is DSL for the termination but as FTTN something had to terminate it to the premises.
U-Verse is not a Fiber footprint per se. Is is a FTTN play with DSL as the terminating technology. To call it a fiber play would be like calling a Litespan a fiber play.
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