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AT&T Winds Down U-verse TV Era

Mari Silbey
2/17/2016
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AT&T broadcast its intentions to migrate away from the U-verse TV platform last year, but the roadmap got a little clearer this week with new statements from the financial analyst community and AT&T itself.

As reported by Bloomberg, AT&T Inc. (NYSE: T) is now acknowledging a marketing push that leads with DirecTV as a preferred option over U-verse. AT&T spokesperson Brad Burns said a DirecTV-first approach gives the telco an opportunity to realize benefits gained from the DirecTV acquisition. But Burns added that "our first priority is to listen to our customers and meet their needs, and if we determine a customer will be better served with the U-verse product, we offer attractive and compelling options."

CreditSights financial analyst Chris Ucko extended the narrative further. Pointing to cost savings inherent in the DirecTV model, Ucko declared that "AT&T is going to actively get out of the U-verse business."

Because of DirecTV's national footprint, the satellite TV division of AT&T enjoys lower program licensing costs than the U-verse business. Plus, if AT&T can move a large chunk of video subscribers away from the U-verse option, it can potentially recoup some of the bandwidth currently being using to transport IP video and other broadband services.


For more on TV technology trends, check out our dedicated video services content channel here on Light Reading.


Over the longer term, AT&T has already said it plans to combine the assets of U-verse and DirecTV to create an agnostic video platform running across wireline, satellite and cellular networks. But that will take some time. For now, the telco is focused on transitioning as many customers as possible away from U-verse and toward DirecTV.

That strategy has been quite successful so far. In its last quarter, AT&T reported a boost of 214,000 new DirecTV subscribers. The gain was more than offset, however, by a loss of 240,000 U-verse TV subs. (See AT&T Eyes TV Everywhere Gold .)

For further insight on how AT&T's video plans match up against other pay-TV rivals see Light Reading's report, Innovation Roundup: How US Pay-TV Providers Stack Up.

— Mari Silbey, Senior Editor, Cable/Video, Light Reading

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KBode
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KBode,
User Rank: Light Sabre
2/23/2016 | 6:18:24 PM
Re: uh-huh
Somebody in the major AT&T ranks thinks it's ingenious to bundle DirecTV with wireless. I don't see it given the rise in cord cutting and the high costs of mobile data, but perhaps their pie charts indicate something those of us on the outside don't see (aside from them just spending less money on real infrastructure improvements, yet charging more for bandwidth and TV). 
kq4ym
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kq4ym,
User Rank: Light Sabre
2/23/2016 | 3:52:28 PM
Re: uh-huh
It would seem there's something in the message that they say "if we determine a customer will be better served with the U-verse product, we offer attractive and compelling options." And just what might those compelling options be, and will in fact customers be better served with U-verse?
KBode
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KBode,
User Rank: Light Sabre
2/22/2016 | 3:29:06 PM
Re: uh-huh
They've made it clear they wanted to offload vanilla DSL customers. They may keep U-Verse users even though they're eliminating the TV component, however. With TV gone those lines are capable of notably faster speeds. So maybe they'll keep them around for a while, just urge them to get DirecTV if they want TV. Curious to spend $69 billion on DirecTV to avoid spending probably half that to upgrade to fiber to the home.
linkedin46122
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linkedin46122,
User Rank: Light Beer
2/18/2016 | 8:57:44 AM
let's look at the numbers shall we?
I follow telecom and technology regularly. Another friend told me that I'm "too obsessed" with internet service providers and their business. Here's the thing: without internet, we cannot communicate the ways we are today through social media, gaming, video, internet streaming, and even business. That's a fact.

A month ago I spoke to a brilliant mind and engineer who he and his partner both work for a major telecom named CenturyLink in this country. He shared his views of why his company is having difficulties deploying internet in the areas it serves. He explained to me that CenturyLink has grown through mergers and acquisitions with the last one completed by merging with another telecom Qwest Communications in 2011. The problem for CenturyLink is that Qwest was a former baby bell (from MA BELL) that did not keep a good track record of the assets (hardware, centers, central offices, inventory) in which some of that information has been lost. Without the correct asset information, CenturyLink has to start all over and track every piece of hardware, every cable, every wire-al of that information to accurately assess each area/every state they serve to know what they can deliver and if that outdated hardware is worth upgrading for better service.

That is the case for every other technology/telecom company that decides to buy out another.

Frontier Communications is set to take over a $10.54 billion buy from Verizon in the states of California, Florida and Texas at the end of March 30, 2016. Already the company has started the transition in northern Texas doing a conversion from all Verizon peering points to others. This is a massive undertaking and I sincerely want Frontier to succeed. 

The other reason I heavily follow telecom is because wall street is trying to pressure them into implementing data usage caps on wireline networks nationally-in other words you get a certain amount of data, and then if you go over, you are charged additionally. I can see this works for cellular/wireless, but this is screwing people over of their hard-earned money out of greed.

And now the federal government is providing $1.5 billion CAF II funding for these companies to expand internet to areas that are either not served or underserved. Here's the problem though :

If there is any more reason enough as to where the CAF II funding to expand and improve internet access ACTUALLY goes, THIS is the reason. Executives sitting on their thrones making decisions to cut the people that actually do the work versus the poor decision makers or the processes that are too time-consuming to actually get the work done because of all the "templates" or "reports" that need to go out. How many executives would give up part of their compensation to help the company??? NONE OF THEM.

Take a look and decide for yourselves if these people deserve this kind of compensation in exchange for the sub-par or NO service you get in the areas they are currently or supposed to serve :

Consolidated Communications CEO Bob Udell
Total Compensation (2014): $846,825
Total compensation (2013): $1,256,508
Salary: $323,000
Other compensation (stock awards, bonuses, etc.): $523,825
Duration with company: Since 1993

FairPoint CEO Paul Sunu
Total compensation (2014): $2,559,319
Total compensation (2013): $2,359,299
Salary: $815,000
Other compensation (stock awards, bonuses, etc.): $1,744,239
Duration with company: Since 2005

TDS Telecom CEO David A. Wittwer
Total compensation (2014): $2,616,877
Total compensation (2013): $2,322,278
Salary: $587,000
Other compensation (stock awards, bonuses, etc.): $2,029,877
Duration with company: Since 1983

Cincinnati Bell CEO Ted Torbeck
Total compensation (2014): $3,339,000
Total compensation (2013): $5,338,744
Salary: $750,000
Other compensation (stock awards, bonuses, etc.): $2,589,000
Duration with company: Since 2010. Torbeck took over the CEO post from John Cassidy, who retired in 2013.

Windstream CEO Tony Thomas
Total compensation (2014): $3,367,476
Total compensation (2013): $2,121,115
Salary: $538,461
Other compensation (stock awards, bonuses, etc.): $2,829,015
Duration with company: Since 1998

Frontier CEO Dan McCarthy
Total compensation (2014): $3,979,239
Total compensation (2013): $2,611,725
Salary: $658,333
Other compensation (stock awards, bonuses, etc.): $3,320,906
Duration with company: Since 1990

Level 3 Communications CEO Jeff Storey
Total compensation (2014): $10,850,861
Total compensation (2013): $8,018,232
Salary: $978,846
Other compensation (stock awards, bonuses, etc.): $6,872,015
Duration with company: Joined company in 2008 as COO and became CEO in April 2013.

CenturyLink CEO Glen F. Post III
Total compensation (2014): $13,131,448
Total compensation (2013): $8,993,247
Salary: $1,100,000
Other compensation (stock awards, bonuses, etc.): $12,031,448
Duration with company: Since 1982

Verizon Communications CEO Lowell McAdam
Total compensation (2014): $18,306,509
Total compensation (2013): $15,826,606
Salary: $1,580,769
Other compensation (stock awards, etc.): $16,725,740
Duration with company: Since 2000 (inception of Verizon Wireless)

AT&T CEO Randall Stephenson
Total compensation (2014): $23,984,315
Total compensation (2013): $23,247,167
Salary: $1,691,667
Other compensation (stock awards, etc.): $22,292,648
Duration with company: Since 1982

http://www.fiercetelecom.com/special-reports/10-highest-paid-ceos-wireline-2014

I wonder how much longer are Americans going to continue to put up with B.S. like this before we finally as a collective come together and realize that we are being screwed? 

Case in point : my dealings with AT&T. After the last two bills of $84.00 with bogus usage charges on a 6-meg, 150 gigabyte a month capped last mile DSL connection. Worse, a badly designed, difficult to navigate website and the meter was not accessible most of the time. I finally said goodbye to them and moved to Comcast internet which for now, they are pretty good and reliable. However we all know that they have usage based trials happening in certain uncompetitive markets/monopolies/duopolies they serve. In the Bay Area, Comcast has temporarily suspended the data caps but they are coming.

Unfortunately the problem with internet access goes deeper than the monopolies, acquisitions and too few competition.

Whether you are on AT&T, Time Warner, Comcast, CenturyLink, Cox, Charter, Mediacom, SuddenLink, or Brighthouse, do you really want metered internet (which has already proven to be inaccurate as people have been billed for usage they did not do) every time you watch Netflix, Amazon Prime, HULU, or use your PS4 or XBOX?

Also, where are the CEOs of streaming and gaming services Netflix, Amazon, Sony, Microsoft? Where do YOU stand on this?

We already pay A LOT of money for internet that in many places is either ok or lousy. Many if not all of you use the internet for one form of communication or another at any given moment.

Telecom is a big issue for me. 

This affects all of us.
linkedin46122
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linkedin46122,
User Rank: Light Beer
2/18/2016 | 8:53:21 AM
uh-huh
An AT&T rep gave this statement: "To realize the many benefits of our DirecTV acquisition, we are leading our video marketing approach with DirecTV. However, our first priority is to listen to our customers and meet their needs, and if we determine a customer will be better served with the U-verse product, we offer attractive and compelling options." 
listen to the customer???? LOL. What a crock of horseshit coming from Randall Stephenson. If that were true, I have a bridge to sell you too LOL. The man who is paid over $20 million a year accepted CAF II funding because he wants a new yacht.

As soon as enough people move over to Direct TV, AT&T is going to sell off its wireline to CenturyLink, Frontier and Windstream.
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