AT&T forecasts strong Q2 U-verse results during traditionally slow season and fewer DSL migrations
AT&T (NYSE: T) has issued an upbeat second-quarter 2014 forecast about its U-verse broadband and TV results during what is typically a challenging quarter.
"U-verse video additions bundled with broadband will continue to perform well," said AT&T in a statement, adding that it expects "U-verse broadband to be solid even with second-quarter seasonality and fewer migrations from DSL."
The telco emphasized that the ongoing acceptance of consumers bundling voice, video and data services is another reason that its pending acquisition of DirecTV is a good fit. "Growing consumer preference for buying broadband and pay TV services bundled together reinforces the strategic rationale of AT&T's proposed acquisition of DIRECTV," AT&T said.
Interestingly, AT&T has continued to hold onto its leadership position in the telco TV race, a trend that will likely continue when it announces its second-quarter results.
During the first quarter, the telco beat out its fellow RBOC brother in terms of overall video subscriber growth by adding 634,000 U-verse broadband and 201,000 U-verse TV subscribers. It ended the quarter with a total of 11 million and 5.7 million subscribers, respectively.
By comparison, Verizon (NYSE: VZ) only added 98,000 net new FiOS Internet connections and 57,000 net new FiOS video connections during the same period.
While the consumer segment continues to be the dominant growth engine in its wireline portfolio, AT&T forecast strong growth in U-verse-based business broadband and strategic services.
AT&T said it expects "strategic business services revenue growth in the mid-teens, with continued economic pressures; and wireline margins continue under pressure, reflecting content cost increases, fiber expansion and high-speed broadband subscriber growth."
- see the release
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