AT&T, Verizon see video as major growth engine

With their landline voice revenues continually being eaten away by cable and wireless substitution, AT&T and Verizon are confident that their billion-dollar bets on video are going to pay off in big ways. First up is AT&T. Although growth slowed a bit during second quarter, AT&T reported that it had had 1.6 million U-Verse customers at the end of Q2, and the Texas-based service provider predicts that its telco TV offering will hit the 30 million subscriber mark in the next few years. Randall Stephenson believes that the growth of U-Verse video service will follow a similar growth path to its broadband service, which now reaches 90 percent of its customer base. "There is no reason why it should be different on the video side," Stephenson said at the Goldman Sachs Communacopia event.

Similarly, Verizon's CEO Ivan Seidenberg, who says he's no longer worried about landline loss, believes that consumers want more interactive TV services. Saying that interactive TV is a "huge opportunity," Verizon plans to continue adding new features to its Widget Bazaar platform that will enable users to access other social networking applications including Facebook, Twitter and YouTube from their TV screen. At the end of June, Verizon reported it had 2.5 million FiOS Fiber to the premise subscribers.

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