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Major US telcos continue to surge in TV connections, wireline recovery

Both of the major US telcos, AT&T and Verizon, have had quarterly results in line with expectation, which means that the recovery in the wireline oper


Published: 28 April, 2011


Both of the major US telcos, AT&T and Verizon, have had quarterly results in line with expectation, which means that the recovery in the wireline operations due to TV services, their U-Verse and FiOS services, continues apace.

AT&T added 218,000 U-verse TV subscribers to reach 3.2 million, while Verizon added 192,000 net FiOS TV subscribes for a total of 3.7 million TV connections as the two between them are a whisker away from having 7 million new architecture wired TV services between them, a number starting to look noticeable against Cable’s almost 70 million TV subscribers throughout the US.

AT&T itself boasts 5 million TV customers, but 1.9 million of these are older satellite TV connections, and it lost 11.3% of these last year down from 2.13 million, which means that poor old DirecTV, after winning the verdict to be the only satellite TV system pushed by AT&T, won’t be getting much benefit out of the deal.

But it is the attach rates which make all the difference to their respective wireline revenues, with continued high broadband and voice attach rates to the new TV services. AT&T now only has 42.5 million fixed lines down from over 47 million a year earlier, but has added 175,000 fixed line broadband connections taking it to 16.5 million. AT&T’s U-verse Internet attach rate was above 90% of U-Verse customers and 60% took AT&T U-verse Voice. So now that over 75% of U-verse TV subscribers have a triple- or quad-play option with the triple play ARPU now at $168 a month, up 14.3%.

Verizon added 207,000 net new FiOS Internet connections bringing it to 4.3 million FiOS Internet connection. FiOS Internet penetration was 33.1% with the product available for sale to 13 million homes compared to 29% and 12 million, last year, to bring broadband connections to 8.5 million, up 98,000 or 3%. For both companies this means that the DSL lines it is losing are consistently being outstripped by new service internet additions. Almost certainly this means that some cable companies somewhere are losing broadband customers not gaining them, despite having what they perceive as a vastly superior technology in DOCSIS 3.0 (although there are still some US homes without broadband, so everyone could still be growing we suppose).

This is now starting to happen to voice as well, with Verizon voice connections, showing large increases in FiOS Digital Voice compared to the drops in traditional switched access lines. Today Verizon has just 25.5 million lines, but experienced the smallest year-over-year decline since 2008.

AT&T revenues were up 2.3% to $31.2 billion with Wireless revenues up 10.2% and peculiarly up just under 2 million cellular subscribers despite losing the iPhone exclusivity deal. AT&T now has 97.5 million subscribers in service. This is because AT&T still signed up 3.6 million iPhones, despite losing the exclusive, and 5.5 million smart phones in total. iPhone churn never changed a bit either.

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