AT&T’s U-verse Growth Also Slows In Q2

Adds 190,000 U-verse TV, 488,000 U-verse Broadband Subs
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Like Verizon Communications and the services it pipes over its FiOS platform, AT&T is also showing signs of slower growth for its U-verse offerings.

AT&T added 190,000 U-verse TV subs in the quarter, expanding its reach to 5.9 million, and posted a net gain of 488,000 U-verse high-speed Internet customers, extending that total to 11.5 million subs. That compared to the 233,000 U-Verse TV subs and 641,000 net U-verse Internet customers AT&T added in the year-ago quarter.

With DSL losses factored in, AT&T’s total wireline broadband sub base dropped by 55,000 in the second quarter, which the telco chalked up to typical seasonality. But 70% of all AT&T wireline broadband subs are now on U-verse, compared to 55% in the year-ago period.

About 61% of U-verse broadband subs are getting plans that deliver 12 Mbps or more, and 97% of AT&T’s video customers now take a service bundle, with two-thirds taking three or four services from the telco.

AT&T ended the period with TV penetration of about 21% and U-verse broadband penetration of more than 20%.

“U-verse has been a solid and consistent story for us,” AT&T CFO John Stephens said on Wednesday’s earnings call, noting that U-verse now represents 62% of the company’s consumer revenues and that the ARPU for U-verse triple-play customers is north of $170 per month.

He was also optimistic that U-verse would continue to increase service penetration the longer its in a market, and believes growth opportunities are ahead as AT&T’s Project VIP expands the reach of the platform into more areas.

AT&T's wireline voice service continued to get hammered. The telco ended the second quarter with 26.95 million subs in the category, down from 30.22 million in the year-ago period.

Total wireline revenues in the second quarter reached $14.6 billion, down 0.9% from a year ago, and up 0.2% from the first quarter of 2014. Total U-verse revenues, including business services, rose 24.8% year-over-year, and is flirting with $15 billion in annualized revenue, the company said.

AT&T’s consolidated second revenues rose 1.6%, to $32.6 billion, and net income of $3.5 billion (68 cents per share), versus $3.8 billion (71 cents) in the year-ago quarter.