AT&T offers upbeat forecast for HDTV service

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AT&T, the largest US telecommunications group, plans to roll out a high definition version of its U-verse IPTV service in 15 markets by year end.

AT&T gave and upbeat assessment of the outlook for its IPTV service on Monday during a conference call with investors to discuss the company’s third quarter results.

The results highlighted continued gains by AT&T’s Cingular Wireless joint venture, stabilising enterprise revenues as companies migrate to IP-based services and signs that line losses to wireless and cable TV rivals could be peaking.

AT&T has been investing heavily in a new fibre optic network called Project Lightspeed in order to support the U-verse advanced video and data service and compete directly with cable TV operators including Comcast and Time Warner.

Rick Lindner, AT&T’s chief financial officer, said on Monday that the initial customer response to U-verse – launched first in San Antonio, Texas in June – had been “ very positive.”

He said AT&T plans to upgrade the 3,000 subscribers in San Antonio to HDTV service in late November and expects to launch HDTV U-verse services in approximately 15 metropolitan markets across its traditional 13-state region by the end of 2006.

Like Verizon, which is also rolling out a advanced network capable of delivering TV and video content, AT&T is relying on growth markets including video, broadband and wireless to offset flat or falling revenues in traditional voice markets.

Consolidated third-quarter net income at AT&T, which was formed through the merger of SBC Communications and the old AT&T a year ago, increased by 74 per cent as earnings at Cingular Wireless quadrupled and post merger job losses helped cut costs. Net income advanced to $2.17bn, or 56 cents a share, from $1.25bn, or 38 cents, a year earlier, before on revenues that totaled $15.6bn, up from a per-merger $10.3bn.

Among significant changes, AT&T reported that customers switched off 824,000 local lines, fewer than the 857,000 in the second quarter. “I think we are reaching a peak [of line losses],” said Mr Lindner. He also noted that regional business revenues increased by 6.6 per cent, driven mostly by the switch to IP-based telephony.

AT&T waiting for Federal Communication Commission approval to complete its planned purchase of BellSouth. The FCC is due to vote on the merger on November 3.

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