AT&T tries to stop video bleeding with DirecTv tourniquet

by Steve Blum • , , ,

AT&T is cutting off its Uverse video service, according to a story on Bloomberg.com. It’s no longer making Uverse set top boxes and new video customers will be hooked up to DirecTv’s satellite service. With video customers fleeing to cable, AT&T’s move comes not a moment too soon…

The shift to DirecTV was reflected in fourth-quarter results. U-verse subscribers fell 4 percent, the worst loss ever, as 240,000 customers canceled service, the company said. And while DirecTV gains of 214,000 customers almost offset the loss, U-verse defectors helped pump up cable TV growth. Comcast Corp. had its biggest user gain in eight years.

AT&T says that while it’s focusing on DirecTV, it isn’t shutting down U-verse.

“To realize the many benefits of our DirecTV acquisition, we are leading our video marketing approach with DirecTV,” said Brad Burns, an AT&T spokesman. “However, our first priority is to listen to our customers and meet their needs, and if we determine a customer will be better served with the U-verse product, we offer attractive and compelling options.”

Translation: we will do everything we can to hang on to existing Uverse video subscribers until we can move a sufficient number of them to DirecTv. Then we’ll shut down the Uverse video stream and reclaim the bandwidth.

I recommend reading the whole article. It concludes with the assessment that AT&T’s future lay with fiber – which it is very selectively deploying – and wireless. It’ll squeeze what it can out of existing copper networks by offloading as much traffic as possible to satellite and terrestrial wireless, but upgrades aren’t in the picture.