AT&T: U-Verse TV Spending to Increase

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AT&T expects to increase capital spending on its U-verse TV rollout through the end of 2008 by as much as $1.4 billion more than it previous expected.

In a May 4 quarterly filing, the telco reported revised projections of $4 billion-$4.5 billion in spending over 2007 and 2008 on Project Lightspeed, the network AT&T is building to deliver video services over copper wiring in its traditional 13-state service area.

That brings the total projected costs for U-verse to $6 billion-$6.5 billion from 2004-08, compared with its previous expectations of spending $5.1 billion over that time period.

"Estimated expenditures have increased due to expansion of the programming and features of the video offering and additional network conditioning," AT&T's filing said. The company added that its total expected capital spending for 2007 and 2008 has not changed.

Asked for more information, AT&T spokeswoman Jenny Parker said the increases reflect additional investment in infrastructure to support "an expanded channel lineup," adding that the company is also paying a premium to contractors to ensure that they will stay on the U-verse TV deployments.

AT&T also slightly scaled back the scope of the U-verse network buildout. The telco now says it expects the service to be available to 18 million households by the end of 2008; it had previously expected to pass 19 million homes by then. U-verse TV is currently available in limited areas of 15 markets.

The company last year cited the need to make "enhancements" to Microsoft's Internet-protocol-TV software as contributing to delays in its rollout.

In its May 4 filing, AT&T said, "We continue to work with our vendors to continue to improve, in a timely manner, the requisite hardware and software technology," but added, "Our deployment plans could be delayed if we do not receive required equipment and software on schedule."

Regarding content acquisition, AT&T said, "We have completed most negotiations with programming owners (e.g., movie studios and cable networks) to offer existing television programs and movies and, if applicable, other new interactive services."

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