AT & T pulls plug on video service from DirecTV

Wed, 12/12/2007 - 8:20am
Mike Robuck

During a call with analysts yesterday, AT&T said it will stop reselling satellite video services from DirecTV to its customers in the first quarter of 2008.

AT&T has reseller agreements with both DirecTV and EchoStar Communications, recently renamed Dish Network Corp., and is expected to pick between the two before the end of the year. Rumors have also abounded that AT&T would try to purchase Dish Network, but CEO Randall Stephenson told Reuters that the company wasn’t missing any large strategic pieces.

AT&T CFO Rick Linder told Reuters that the company hasn’t made a final decision between DirecTV and Dish Network, and that it could take until next year’s second quarter before a decision is reached.

While AT&T will stop offering the DirecTV service to its phone customers in the first quarter, its agreement with Dish Network runs until the end of next year.

Following AT&T’s announcement, DirecTV issued an e-mail statement that said AT&T’s decision would have minimal impact on its business, and that it could still pursue further business opportunities with AT&T once the EchoStar agreement expires.

AT&T’s decision to cut one of its satellite resellers may be an indication that the company is feeling more confident about its own video service. In September, AT&T said that it had more than 126,000 subscribers to its U-verse service. U-verse is available to 5.5 million homes currently, but AT&T said it expects it to be available to 30 million homes by the end of 2010.


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