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AT&T wants to ditch satellite dishes and at the start of 2018 launch a “wireless-centric” direct-to-home video service that leverages its DirecTV Now offering. 

Speaking at the Goldman Sachs Communacopia conference in New York, AT&T CEO Randall Stephenson said the operator would begin beta testing the software-based platform in the fourth quarter of this year. 

The latest offering would consist of a new thin-client hardware, and the broadband service of a customer’s choosing.

Stephenson noted that the company has been moving in this direction since closing on its acquisition of satellite TV provider DirecTV in 2015. That enabled AT&T to quickly get all of the rights for DirecTV content, and launch DirecTV now within a year, at a lower price point than traditional TV subscriptions, according to Stephenson.

Pay TV subscriptions have been on the decline, and reported a record loss of 351,000 traditional pay TV subscribers in the second quarter of 2017. However in the same period the company added 152,000 new subscribers to its OTT DirecTV now service.

Stephenson said that it is no surprise, as the average revenue per video subscriber is well over $100.

“It’s a price issue, content costs continue to escalate, prices on the cable bundle continue to go up, and so people are opting out of the cable bundle,” he noted.

Stephenson said a software-based solution brings customer acquisition costs down dramatically. He also noted that the new service could include basic content packages, but also premium bundles with features like DirecTV’s NFL Sunday Ticket service.

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