AT&T (NYSE: T) will begin offering its 1 Gbps GigaPower service in three Nashville-area cities, setting a further challenge to local cable incumbent Comcast (NASDAQ: CMCSA) and up-and-coming provider Google Fiber (NASDAQ: GOOG).
In this latest build out initiative, AT&T will offer 1 Gbps service in parts of Berry Hill, Brentwood, Hendersonville and surrounding communities.
This will complement the areas where it previously said it would deliver service, including Clarksville, Franklin, Gallatin, Lebanon, Murfreesboro, Nashville, Smyrna, and Spring Hill.
Eligible customers will have the option of choosing between either AT&T's satellite-based DirecTV or U-verse video options.
DirecTV customers will be able to access over 315 channels, with more than 200 of them in full HD. Interestingly, reports have emerged that AT&T is looking to phase out its U-verse video product in favor of DirecTV.
Customers can also choose from single, double and triple play offers, including a $70 monthly standalone broadband plan called U-verse high speed Internet Premier; U-verse High Speed Internet Premier + TV for $120 a month; and U-verse High Speed Internet Premier + TV + Voice for $150 a month.
Each of the packages includes a three-year price guarantee and waivers of equipment, installation and activation fees.
There are a few catches with this latest 1 Gbps rollout. It will only be available in parts of these communities, and users who want to access the $70 standalone service have to agree to let AT&T track their web surfing via its Internet Preferences program.
The timing for this rollout comes as AT&T prepares to battle two equally aggressive competitors -- Comcast and Google Fiber.
When AT&T began building out the 1 Gbps service in Nashville last May it was met Comcast entering the market, which announced plans to offer its faster 2 Gbps offering. However, Comcast initially delayed the launch in Nashville area and in several other promised cities.
With Comcast, the bigger threat for AT&T will be when the cable operator decides to complement the 2 Gbps service with its emerging 1 Gbps plans that it will offer over its existing HFC plant.
Although it has not revealed any specific pricing, Comcast announced earlier this month Nashville and Atlanta will be among the first of five markets where it will offer the DOCSIS 3.1-based 1 Gbps service this year. It is also going to bring the service to three other AT&T-based markets, including Chicago, Detroit and Miami later this year.
Comcast did not reveal pricing yet, but a company executive did confirm during a fourth-quarter 2015 earnings call that it will be rolling out the service throughout a large part of its cable footprint.
Meanwhile, Google Fiber said in January 2015 that it plans to bring its 1 Gbps service to four additional markets: Atlanta, Nashville, and Charlotte and Raleigh-Durham, N.C. However, it has not revealed any specific timelines when service will be actually available.
What will be interesting to watch is how AT&T will respond to Comcast and Google Fiber in terms of pricing. In certain markets like Austin and Cupertino, Calif., AT&T adjusted its pricing regime when Google Fiber announced it was coming.
AT&T also appears to be following Comcast's lead in other cases. The day after Comcast announced its intent to bring DOCSIS 3.1-based services to five markets, AT&T itself said it would expand GigaPower in four large metros.
Initially, Comcast's 2 Gbps service pricing was quite steep in that it requires eligible customers to pay up to $1,000 to get the service installed.
Regardless of the competitive challenge, AT&T has rolled out 1 Gbps in 20 of the nation's largest metros areas, and it plans to expand ultra-fast Internet service in parts of 36 additional metro areas to serve a total of at least 56 metros.
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