AT&T (NYSE: T) is launching its much-talked-about 45/6 Mbps High Speed Internet Power option in California and Nevada to challenge incumbent cable operators Comcast (Nasdaq: CMCSA) and Charter Communications (Nasdaq: CHTR).
News of the new 45 Mbps offering should not be surprising. AT&T CFO John Stephens outlined the 45 Mbps service option during its Q2 2013 earnings call, adding that it plans to introduce a 75 Mbps and 100 Mbps option later this year.
The 45/6 Mbps option is part of the telco's Project VIP investment where it will expand and enhance its wireline IP network to about 57 million customer locations in its service territory by the end of the year 2015. As of the end of the second quarter, AT&T said it had expanded its wireline IP-based network build by "a total of 1.8 million U-verse broadband customer locations, including 500,000 U-verse video customer locations."
Eligible residential customers will be able to get the service at the introductory rate of $49.95 a month for up to 24 months when they bundle the broadband service with U-verse TV and voice services. Existing U-verse customers will have the option to upgrade their existing broadband package and get a $10 off their bill for 12 months.
After the introductory period ends, the Power tier will be offered at $76 per month.
In related news, AT&T announced that it is enhancing its U-verse TV U200 TV and U-verse Internet Max Plus bundle by offering HBO and streaming video service HBO Go on a promotional basis for up to 24 months. Customers who subscribe to the U-verse TV U300 package will get access to HBO and a number of other premium content stations for 24 months, including Starz and Starz Play, Encore and Encore Play, Showtime and The Movie Channel.
They can also purchase a $114 triple play bundle for up to 24 months that includes the U-verse TV U300 package, 18 Mbps Internet Max Plus, and U-verse voice.
Bundling was once again a factor in AT&T's Q2 2013 consumer wireline results.
The telco reported that about 90 percent of new U-verse TV customers also signed up for U-verse broadband, while about 70 percent of AT&T U-verse TV subscribers take three or four services from AT&T.
During the quarter, AT&T added 233,000 U-verse TV and 641,000 broadband U-verse customers, bringing it to a total of 5 million U-verse TV and 9.1 million broadband customers.
Second quarter U-verse revenues, including business, were $5.6 billion, up 2.4 percent year-over-year and up 1.8 percent from Q1 2013. U-verse now represents 51 percent of consumer revenues, up from 41 percent in the same quarter last year.
For more:
- see this release
- and the HBO announcement
Special Report: Wireline telecom earnings in the second quarter of 2013
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