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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.

Copyright The Financial Times Limited 2018. All rights reserved.

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