AT&T (NYSE: T) may be on track to pass 30 million homes with U-verse service--one of the fastest growing parts of its wireline business--by the end of 2011, but it appears that they may stop once that goal is reached.
During a recent Citibank investor's conference, John Stankey, AT&T's President, said that the service provider is confident it can pass 55-60 percent of the homes in their service region.
Within the broadband data realm, Stankey said that only 25-30 percent of homes in AT&T's region will be offered ADSL, adding that 20 percent of them are "not a heavy emphasis for investment."
Interestingly, AT&T's goal comes at a time when U-verse continues to resonate with customers in the regions where it's available. In Q1 2011, AT&T added 175,000 new broadband subscribers and 218,000 U-verse subscribers to reach 3.2 million in service. However, the broadband numbers fell short of analyst expectations of 195,000 new subscribers.
But in the regions where AT&T does not have U-verse deployed yet, cable continues to eat the telco's lunch with 50 Mbps and increasingly 100 Mbps DOCSIS-based services over its well-entrenched HFC plant. Of course, cable might have higher speeds, but consumers have to be willing to pay upwards of $100 or more for the 50-100 Mbps connection.
To stem some of its traditional DSL bleeding where it does not have U-verse yet, AT&T like Verizon (NYSE: VZ) is offering a number of special promotions, including low-priced DSL offerings to lure dial-up laggards starting at $14.99. It is also appealing to its growing wireless audience with a special bundle for qualifying U-Verse TV customers a $45 monthly discount for six months covering the cost of U-Verse Internet Max.
- Broadband DSL Reports has this article
Wireline in the first quarter 2011
AT&T wireline results in Q1 reflect strong returns on consumer broadband, IP business services
Competition watch: AT&T links U-Verse and wireless with discounts, Verizon offers broadband incentives