AT&T Turns Wireless/TV Double Play

Offers DirecTV Subs $500 Credit to Switch Mobile Service

AT&T fired another shot in the ongoing mobile price wars, pairing its recently acquired DirecTV satellite TV service with its wireless phone product and offering TV customers $500 in credits for switching cell phone providers.

The moves are a clear signal that AT&T plans to use its newfound TV dominance to help drive its wireless subscribership. The company completed its $48.5 billion purchase of DirecTV on July 24. Combined with its U-Verse TV service, AT&T is now the largest MVPD in the country with 26.3 million customers.

According to AT&T, DirecTV and U-Verse TV customers who switch wireless providers from other carriers like Verizon or Sprint to AT&T would receive a $300 credit per line switched.  In addition, DirecTV customers who purchase a new smartphone from AT&T’s Next plan would receive an additional $200 per phone. That means that a family of four that converts four phone lines and buys four new smartphones could receive credits of about $2,000 ($1,200 for switching lines and $800 for the phones).

Customers that agree to bundle their wireless and satellite TV bills together will receive a $10 monthly credit, or about $120 per year.

“This is a unique offer and unlike anything we’ve ever done – all to celebrate DirecTV now being part of the AT&T family,” said AT&T Mobility Chief Marketing Officer David Christopher in a statement. This is another way we’re making it better when you choose TV and wireless from AT&T.”

The promotion comes shortly after one of DirecTV’s worst subscriber quarter’s in years. In the second quarter, its U.S. operations lost 133,000 net subscribers, compared to a gain of 60,000 in the first quarter and more than twice analysts’ estimates.

Earlier in the day AT&T revised its overall guidance, projecting that revenue will increase in the double-digit percentages in 2015 and free cash flow will be in the $13 billion range, up from previous standalone guidance of about $12 billion. In addition, the company raised earnings per share guidance to between $2.62 per share and $2.68 per share for the year. AT&T’s stock was down about 3% ($1.06 each) to $33.59 per share in early trading Wednesday.