AT&T executives are not exactly impressed that Comcast finally picked up some video customers in the fall.
Scoffing at the 43,000 basic cable subscribers that Comcast Corp. (Nasdaq: CMCSA, CMCSK) added in the fourth quarter, AT&T Inc. (NYSE: T) officials highlighted U-verse's much bigger gains of 194,000 U-verse TV subscribers for the fall and 924,000 TV subs for the year. Speaking on the company's earnings call late Tuesday afternoon, they sneered at Comcast's Q4 achievement while bragging about their own video success in 2013. (See Comcast Breaks Video Sub Skid.)
"While some companies are excited about actually gaining customers, we added almost 200,000 subscribers in the quarter and nearly 1 million for the year," said AT&T CFO and senior executive vice president John Stephens. "Plus, we had our lowest TV churn ever in the fourth quarter."
With its latest video gains, AT&T now has nearly 5.5 million U-verse TV subscribers, up 20.4% from 4.5 million at the end of 2012. That total puts U-verse TV comfortably ahead of Verizon Communications Inc. (NYSE: VZ)'s similar FiOS Video service, which closed last year with almost 5.3 million TV subscribers. It also solidifies U-verse's fifth place ranking among US pay TV providers, behind Comcast, DirecTV Group Inc. (NYSE: DTV), Dish Network LLC (Nasdaq: DISH), and Time Warner Cable Inc. (NYSE: TWC). (See FiOS Slows But Still Grows.)
Further, the latest gains boosted U-verse TV's penetration rate to 21% of customer locations. AT&T said about two-thirds of U-verse TV customers now take three or four services from the company. "This tells us that customers not only want U-verse, but they stay with us once they get it," Stephens said.
On the broadband front, AT&T again notched one of its strongest gains yet with its U-verse Internet service, even though the telco still offers much lower maximum data speeds than Verizon's FiOS Internet and most major MSOs. AT&T reported an impressive increase of 630,000 U-verse Internet subscribers for the fourth quarter and a record total of 2.7 million subscribers for the year as it continued to convert its rapidly dwindling DSL customer base over to its newer hybrid fiber-copper platform.
Due to these latest gains, AT&T now boasts 10.4 million U-verse Internet subscribers, up 34% from 7.7 million a year earlier and well above Verizon's total of 6.1 million FiOS Internet subs. Factoring in its dwindling DSL base, AT&T still has about 14.7 high-speed residential data customers, more than all US broadband players except Comcast. U-verse now accounts for 63% of that total, up from 47% at the close of 2012.
Given that U-verse Internet's penetration rate is still relatively low, AT&T officials contend that the best is yet to come. "We believe we've hit a tipping point with U-verse Broadband," Stephens said. "With the growing base of U-verse subscribers, we feel confident that we can grow broadband subscribers even stronger this coming year."
Overall, AT&T said 10.7 million of its customers now subscribe to either one or both of its main U-verse products. The average monthly revenue generated by its triple-play subs is more than $170.
AT&T reported that total U-verse consumer revenues climbed to $12 billion in 2013, up 27% from $9.7 billion a year ago. U-verse's residential products now account for 57% of the company's consumer wireline revenues, up from 46% a year earlier.
— Alan Breznick, Cable/Video Practice Leader, Light Reading