AT&T U-verse wind-down goes into overdrive, as vendors feel the pain

The imminent demise of AT&T's (NYSE: T) U-verse platform became even more apparent last week with several revealing developments.

First, the company confirmed that it's no longer ordering set-tops for U-verse.

"To realize the many benefits of our DirecTV acquisition, we are leading our video marketing approach with DirecTV," an AT&T rep told FierceInstaller. "However, our first priority is to listen to our customers and meet their needs, and if we determine a customer will be better served with the U-verse product, we offer attractive and compelling options."

That news was followed by comments made during Arris' fourth-quarter earnings report, during which the vendor blamed much of its 12.7 percent decline in quarterly revenue to slowdowns in U-verse CPE product orders. 

"As AT&T has reported, they're moving away from U-verse. And as a result, our sales of U-verse video equipment have bottomed out," said Arris Chairman and CEO Bob Stanzione told investors.

Arris's experience with U-verse comes as the AT&T service shed 240,000 video customers in the fourth quarter.

AT&T has made no secret out of its intentions to migrate its video subscriber base to its recently acquired DirecTV platform, which added 214,000 customers in the fourth quarter.

"The DirecTV subscriber additions were stronger than expected … but the U-verse losses were much worse," said MoffettNathanson analyst Craig Moffett, summing up AT&T's fourth quarter pay-TV performance.

"Financially, this is a good trade; a big reason AT&T [acquired DirecTV] was to get out from under burdensome programming costs that plague U-verse. Still, this result is, in aggregate, a clear disappointment," Moffett added.

Related articles:
Arris earnings dip 12.7% on telco TV slowdown
AT&T reportedly halts U-verse set-top production in latest DirecTV push
Stephenson: AT&T still not 'up to speed' on DirecTV installation

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