AT & T posts strong Q4, vows to expand U-verse
AT&T reported a strong fourth quarter of 2007, paced largely by growth in wireless, and to a lesser extent, in broadband.
U-verse had 126,000 subscribers at the end of Q3; at the end of Q4, that number had increased to 231,000. Adding in satellite viewers from AT&T’s co-marketing deal with DirecTV, the company has a total of 2.3 million video subscribers. Installs are running at a rate of 12,000 per week, ahead of the company’s target of 10,000 per week.
U-verse is now available in 41 markets. On the company’s conference call, CFO Rick Lindner said that AT&T will begin deploying U-verse in the Southeast – the former BellSouth territories.
AT&T plans to be able to deliver a second high-definition (HD) stream and introduce a personal video recorder (PVR) by mid-year. Also, before year’s end, the company expects to start channel bonding to buy more bandwidth.
Lindner reiterated targets announced in December, that the company expects to have more than one million U-verse subscribers by the end of the year and 30 million homes passed by the end of 2010.
He also said that given U-verse is a new service, churn was expectedly high. He did not give the number but said the target is to get churn to less than 2 percent.
AT&T’s broadband revenues grew 13.7 percent in the fourth quarter, to $1.4 billion. Total high-speed Internet connections increased by 396,000 in the quarter, to reach 14.2 million – up 2 million, or 16.3 percent, year-over-year. The company combined its numbers for DSL, U-verse high-speed Internet and satellite broadband services, and the telco did not provide a breakdown.
The company reported a net gain of 2.7 million wireless subscribers, which it said was the highest quarterly subscriber increase ever for any U.S. wireless provider. At the end of Q4, AT&T had 70.1 million wireless customers.
Wireless data revenue increased 57.5 percent compared with Q4 2006, to $2 billion, driven by increased adoption of smartphones and 3G wireless devices. The company said that data now represents about 20 percent of wireless service revenue.
Taking into account the acquisition of BellSouth and the consolidation of Cingular Wireless (formerly a joint venture with BellSouth), AT&T's Q4 2007 revenue totaled $30.4 billion, up 2.9 percent from a year ago. Fourth quarter profit was $3.1 billion, up from $1.9 billion in the year-ago quarter.
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