Despite the threat of the small but growing cord-cutting, AT&T added video subscribers to the U-verse pile in the fourth quarter of 2014.
AT&T gained subs at a slower rate than it did a year earlier, but those numbers were offset a bit by AT&T’s sale of its Connecticut wireline operations to Frontier Communications.
AT&,T, which is in the process of merging with DirecTV, said it tacked on 73,000 U-verse TV subs, extending that total to nearly 6 million (AT&T had about 197,000 U-verse subs in Connecticut). With the Frontier deal factored in, TV additions were down from an increase of 194,000 U-verse TV subs in the year-ago quarter.
AT&T posted a net gain of 405,000 U-verse high-speed Internet subs, versus 630,000 adds in the year-ago period. AT&T ended 2014 with 12.2 million U-verse broadband customers (the Connecticut properties had about 298,000 U-verse high-speed Internet customers).
Update: AT&T addressed the decline in U-verse subscriber growth on Tuesday's earnings call. “Net adds were impacted by a strategic move to improve the profitability of our wireline consumer business,” AT&T CFO John Stephens said. “With our high content costs we targeted profitable, long-term value subscribers with lower churn rates while still taking market share.”
With non-U-verse DSL included, AT&T said its total wireline broadband sub base declined by 51,000 in the quarter, but was up slightly for all of 2014.
The telco said about 97% of AT&T’s video subs take a bundle, with nearly two-thirds of U-verse TV subs taking three or four services from the company. ARPU for U-verse triple-play customers was just north of $170.
At the end of 2014, U-verse TV penetration was 22%, just a notch above U-verse broadband’ s penetration of 21%.
Overall U-verse residential revenues reached $5.6 billion, up 0.1% from the year-ago period. With the Connecticut wireline operations sale factored in, growth was 2.4%.
For the quarter, AT&T posted a net loss of $4 billion (77 cents per share), versus net income of $6.9 billion ($1.31 per share) in the year-ago period. Revenues climbed to $34.4 billion, from $33.16, beating Wall Street expectations of $34.27 billion, according to Reuters.
“Over the last year, we’ve made several moves to significantly transform our business for the future” AT&T chairman and CEO Randall Stephenson said, in a statement. “Our transactions with DIRECTV and Mexican wireless companies Iusacell and Nextel Mexico will make us a very different company. We’ll be unique in the industry because we’ll be able to offer integrated capabilities across a diversified base of services, customers, geographies and technology platforms. After we close DIRECTV, our largest revenue stream will come from business-related accounts, followed by U.S. TV and broadband, U.S. consumer mobility and then international mobility and TV.”