Out with the old, in with the new.
I took another look at AT&T’s Q1 numbers and recent quarterly results, which show that the telco lately has been losing more old-fashioned phone customers than it’s gaining in U-verse or high-speed Internet customers (see table below).
The telco reported about 34.2 million consumer access lines at the end of March, down 2.5 million from the first quarter of 2007. But TV and broadband subs increased only about 2 million. I’m not counting AT&T’s Dish/DirecTV subs in this tally because presumably most of that revenue goes to the DBS partners.
Still, it’s not exactly a zero-sum game. In fact, as chief financial officer Rick Lindner pointed out on the earnings call, AT&T’s revenue per primary voice line subscriber has steadily increased thanks to broadband and TV bundling.
Lindner remained upbeat about the growth prospects for U-verse (well, of course he would, given that the telco upped projected spending for Project Lightspeed to between $4.5 billion and $5.0 billion for 2007-08). He reiterated that AT&T is targeting more than 1 million TV subs by end of the year, which means the telco expects acquisition of U-verse TV subs to accelerate.
The telco’s fiber-to-the-node network, which forms the basis of U-verse, passes more than 9 million living units and is available in 43 markets. According to Lindner, in some areas U-verse has hit more than 10% penetration rate in less than 12 months.
AT&T Consumer Subscribers by Segment
No. of U-verse TV Subscribers
No. of Broadband Subscribers
Consumer Access Lines
QoQ U-verse TV/Broadband Adds Minus Access Lines Lost
Revenue Per Primary Voice Line
Source: AT&T financial reports