AT&T U-Verse Expands

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In announcing second-quarter financial results, AT&T said it upped its U-verse TV subscriber count to 51,000 as of June 30 from 13,000 three months earlier.

“Our U-verse video service has begun to ramp aggressively,” CEO Randall Stephenson said in prepared comments.

The telco also said it activated 146,000 Apple Inc. iPhone subscribers in the last two days of the quarter while Apple reported selling 270,000 (not all of which were immediately activated). AT&T said iPhone sales into July continued to be “strong.”

U-verse services are now available in parts of 23 metro areas. At the end of the second quarter, AT&T said, 5.9% of its primary consumer customers also subscribed to a video service provided through the company, compared with 3.8% a year earlier.

However, most of AT&T’s video subscribers continue to come through its partnerships with DirecTV and EchoStar Communications. The company added 162,000 satellite-video customers in the second quarter, with 1.8 million as of June 30.

Overall, the largest U.S. telecommunications operator reported second-quarter revenue of $29.5 billion, up from $15.8 billion a year ago (excluding the recently acquired BellSouth and Cingular Wireless). On a pro-forma basis, quarterly revenue increased 2% year-over-year. Net income was $2.9 billion compared with $1.8 billion a year earlier. AT&T said growth was driven by wireless, Internet-protocol-based services and its enterprise segment.

AT&T’s legacy consumer phone business declined by 193,000 lines in the quarter, compared with a drop of 528,000 lines a year ago. However, the company said it had a net gain of 946,000 regional consumer connections — which include retail access lines, high-speed Internet and video — over the past year.

In its earnings announcement July 24, the telco said, “The change in total consumer switched-access lines was generally consistent with year-earlier results, despite a nearly 30% increase in cable-telephony coverage in AT&T’s footprint.”

AT&T said costs for U-verse continue to be in line with the company’s previous outlook. In May, the company said the U-verse network buildout would be more expensive than it previously expected, costing $6 billion to $6.5 billion from 2004-08, compared with its previous estimates of spending $5.1 billion over that time period.

Verizon Communications, meanwhile, claimed last month to have nearly hit the half-million mark for FiOS TV.

Verizon has a six-year price tag of $23 billion for its fiber-optic buildout, although it said the FiOS network will also allow it to avoid spending $5 billion on copper.

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