Verizon and AT&T numbers came out this week, both re-assuring their investors that they can weather the storm of recession, with predictable wireless customers gains, and wireline voice circuits down.
Both showed decent increases in their TV services, with AT&T’s quarterly U-Verse additions slowly approaching those of Verizon’s FiOS, but with both companies continuing to lose significant consumer voice lines.
What both companies are doing is turning themselves into triple play operations, so while the broadband lines associated with U-Verse and FiOS have gone up, their other broadband operations are now withering or just barely surviving.
Verizon still added more TV customers than AT&T, but the gap is closing, In the quarter together they added 567,000 new U-Verse and FiOS TV customers, with Verizon’s FiOS taking the lion’s share at 303,000 net adds in the quarter to a total of 1.9 million, just 39,000 ahead of AT&T’s quarterly total of net adds of 264,000, which takes its total to just over 1 million.
New FiOS broadband lines this quarter were up 282,000, but in total broadband lines at Verizon was only up 214,000 meaning that it lost 68,000 traditional DSL lines. At AT&T a similar pattern emerged with broadband lines up 240,000 but this includes DSL lines, U-verse high speed Internet access as well as satellite broadband. No separate figure was given for U-verse access but AT&T said that the attach rate is 90% for broadband on U-Verse homes, so this should be somewhere around 238,000 lines, so almost all of the broadband growth is coming from there.
It almost seems like the RBOCs are conceding that traditional DSL broadband cannot compete on its own with cable, and they are giving this less attention. AT&T appeared to be trying to hide this and its headline figures bundled broadband wireless additions with broadband additions, at 357,000 but its detailed figures still breaks it out. It now says it has 16.3 million consumer broadband lines, but only 15 million of these are wired connections and the rest are 3G LapTop Connect cards.
Much the same thing is happening on traditional voice, an area where much of the growth in cable customers is coming from as they push VoIP services to their customers. Most cable results are out next week. Verizon has lost some 3.7 million voice lines this year and 911,000 in the quarter, while AT&T has lost 2.8 million lines and 850,000 last quarter. This is the net amount because both are replacing exchange lines with VoIP and naturally many of the losses are customers going purely to wireless voice.
AT&T said it now has 77 million wireless customers, while Verizon has 72 million not counting Alltel, which it is in the process of absorbing.
Other pay TV services which have come out with numbers this week include BSkyB in the UK which says it has acquired 171,000 customers in the second quarter of its financial year, more than the 167,000 it acquired this time last year, taking its customers base to 9.24 million DTH pay TV customers. It also says that more than 50% of these have DVRs, that it has added 17 new HD channels and has reached 1.96 broadband customers and 1.5 million domestic telephony customers using VoIP. Sky only bought its way into the ISP market a few year ago so has been growing these bases way behind its pay TV households.
Also Netherlands telco KPN announced its results and said it now has 775,000 pay-TV subscribers, but only 40,000 are IPTV customers the rest pay for a digital terrestrial broadcast services using DVB-T.