AT&T's second quarter earnings indicate that the company's broadband growth has slowed, and in some instances, sharply reversed. While on the surface AT&T's addition of 2.1 million users to its wireless network looks great, AT&T's now including "connected" cars (1 million, which may not ultimately stay "connected") and 552,000 tablets. The company actually saw a net loss of around 200,000 phone customers.
These phone reductions are thanks to T-Mobile, or more accurately thanks to AT&T's refusal to more seriously compete with T-Mobile on price.
It's on the often ignored fixed-line side of the coin where things get more interesting (read: worse).
According to AT&T, the company saw a 652,000 user reduction in traditional phone service for the quarter, and net reduction in total broadband users of 136,000 for the quarter thanks to DSL losses. That's not surprising; the company has been looking to axe unwanted DSL customers in markets it doesn't want to upgrade.
But it also saw a drop in U-Verse video subscribers of 22,000 thanks to cord cutting.
So basically AT&T is losing wireless phone, fixed-line broadband,
and U-Verse TV users. Meanwhile, it's about to spend $68 billion (including debt) to buy a satellite TV provider on the eve of the Internet video revolution. That's cash that could have gone a long way in helping AT&T's fixed-line network keep pace with faster (DOCSIS 3.1) cable speeds.