AT&T to Stop Reselling DirecTV Service In Q1

Telco Says Still ‘Evaluating’ Long-Term Relationship With Dish

By Todd Spangler -- Multichannel News, 12/11/2007 1:56:00 PM

AT&T will stop reselling DirecTV service in the first quarter, and the telco said it was “evaluating” its deal with EchoStar Communications with the expectation of making a decision about which satellite operator to continue partnering with by the end of next year.

John Stankey, AT&T group president of telecom operations, disclosed the plans Tuesday at the company’s analyst conference in New York. The telco inherited the deal with DirecTV through its acquisition last year of BellSouth.

AT&T’s agreement to sell subscriptions to EchoStar’s Dish Network service extends through the end of 2008. Stankey said AT&T will be “evaluating” deals with DirecTV and EchoStar after 2008, adding, “We can be successful with either one,” according to a Dow Jones report.

In a statement, DirecTV said that AT&T's decision "will have minimal impact on our business in that we have a number of initiatives in place to provide incentives to energize dealers in the [former BellSouth] region, and we will step up our direct-sales efforts." The DBS operator also said "we believe we still have an opportunity to be partners with AT&T after its agreement with [EchoStar] expires."

In recent months, published reports have said AT&T is considering buying either EchoStar or DirecTV, though some analysts have expressed skepticism about such a deal coming to fruition.

AT&T had 2 million direct-broadcast satellite subscribers through DirecTV and EchoStar at the end of September, having added 140,000 in the third quarter.

Earlier Tuesday, AT&T appeared to reaffirm its commitment to the U-verse TV product, telling analysts that it expects to expand the service to be available to 30 million customer locations by 2010 and that it projects having more than 1 million U-verse TV subscribers by the end of 2008, up from 126,000 at the end of September.