AT&T continues to worry us on the video subscription front. Its latest quarterly figure show that it made up no ground in pay TV subs despite its claims that it would cross sell services aggressively to kick off the newly merged company with DirecTV. We felt that for about 18 months AT&T and DirecTV would have a honeymoon period in pay TV, which may make inroads into the savage 700,000 plus subscription losses, which happened at DirecTV while the merger was in doubt.
For AT&T CEO, Randall Stephenson to suggest that, “We’re seeing good momentum with our initial integrated wireless, video and broadband offers. And we’ll expand the integrated choices for customers in the fourth quarter when we launch our new video streaming services,” is to play down the lack of progress and push all expectation into the future.
Satellite TV recovered to 20.1 million, growing 328,000 during the last quarter, and 214,000 the quarter before – so it has almost recovered the losses during the merger, but U-Verse pay TV seems to be falling apart, with 382,000 losses this quarter and 240,000 the quarter before. Despite what AT&T is telling analysts, it appears to be swapping out broadband connected U-Verse subs in favor of DTH satellite one way connected subs.
All that might be fine if it was adding broadband lines, but in its business segment it has fallen 19,000 broadband lines to 1.473 million and another 5,000 in consumer broadband down to 14.3 million, totaling 15.7 million broadband lines. A year ago that was well over 16 million, so it is losing broadband as well as pay TV. Wired voice connections fell to an all-time low, as it tends to each successive quarter.
Revenues were up entirely on the fact that DirecTV has been added to the mix and cellular connections reached 130 million connections, with its lowest ever churn figures and with US cellular net adds of 2.3 million. Revenues reached $40.5 billion, up 24% over prior year’s numbers, without DirecTV and operating income was $7.1 billion versus $5.6 billion and net income at $3.8 billion compared to $3.3 billion. Execs boasted about profitable revenues rather than just revenues, but with falling pay TV and broadband, it will need new offerings in both to sustain that trend – which it says it will have before the year’s end. We will be sure to re-assess at that time.