Telco TV

U-verse TV Loses Momentum, Broadband Stuck In Neutral

10/20/2011 9:46 AM Eastern

AT&T added 176,000 U-verse TV subscribers in the third quarter of 2011 -- to reach 3.6 million total -- well off its pace in recent quarters, while the telco netted out only 3,000 new broadband customers for the period.

The results indicate U-verse TV uptake is slowing down, after AT&T packed on 236,000 subs in the year-ago quarter and 202,000 in the second quarter of 2011. The U-verse network buildout is virtually complete, passing almost 30 million living units in the U.S.

While the company added 504,000 U-verse High Speed Internet subscribers to reach a total of 4.6 million, it lost 501,000 traditional DSL customers. AT&T said more than 70% of consumers have a broadband plan of 3 Mbps or higher.

Overall wireline revenue of $15.0 billion was down 2.2% versus the year-earlier quarter but up slightly sequentially -- which AT&T noted was the segment's first sequential growth in three years. Q3 wireline operating income margin also slipped, to 12.1% compared with 13.0% in the year-earlier quarter and down from 13.1% in the second quarter of 2011.

AT&T continued to shed traditional voice access lines, dropping a whopping 1.2 million sequentially to stand at 40.1 million at the end of September.

Still, AT&T touted that wireline revenue per household served increased 5% versus the year-earlier period and were up 1.4% sequentially -- the fifteenth consecutive quarter of growth in consumer wireline average revenue per unit.

U-verse revenue for the third quarter was $1.7 billion, up from $1.1 billion in the year-ago period. ARPU for U-verse triple-play customers was almost $170, up 5.7% year over year. Companywide penetration of U-verse services among eligible living units is 15.7%, and 24.8% across areas marketed to for 36 months or more.

AT&T preferred to highlight the wireless side of the business, with a net gain in total wireless subscribers of 2.1 million, to reach 100.7 million in service at the end of the quarter.

The telco's total wireless revenue, which includes equipment sales, were up 2.8% year over year to $15.6 billion. Wireless service revenue increased 4.3%, to $14.3 billion.

"Mobile broadband growth continues to be robust, execution was strong across the business, and we delivered another solid quarter," AT&T chairman and CEO Randall Stephenson said in announcing the results Thursday.

Overall, for the quarter ended Sept. 30, 2011, AT&T revenue totaled $31.5 billion, down $103 million (0.3%) from the year-earlier quarter. Net income attributable to AT&T was $3.6 billion ($0.61 per diluted share) versus $12.3 billion in the third quarter of 2010, which included one-time gains from a tax settlement and the sale of Sterling Commerce.

AT&T's capital expenditure for the third quarter was $5.2 million, down 1.8% from $5.3 billion in the third quarter of 2010.

 

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