AT&T's earnings indicate that despite spending $69 billion to acquire DirecTV, the companies collectively continue to see a net loss in overall video subscribers. AT&T's earnings report indicates that AT&T added 328,000 DirecTV subscribers in the first quarter, but lost 382,000 U-Verse TV subscribers -- resulting in a net loss of 54,000 video subscribers during the period. The U-Verse TV losses are a severe uptick from the 240,000 U-Verse TV subscribers AT&T lost in the fourth quarter, and the 92,000 subscribers it lost in the third.
Note this isn't as bad as the initial numbers look, since some of the defections can be explained by the fact that AT&T is actively trying to
push new users toward satellite and appears interested in shuttering its traditional U-Verse TV platform.
Still, the overall net loss in users indicate that AT&T continues to be somewhat plagued by cord cutting and customers migrating back to cable operators due to faster broadband bundles and upgraded cable set top boxes.
On the broadband front, AT&T continues to also hemorrhage DSL customers, losing 181,000 on the quarter. That's in part by design; like Verizon AT&T has no interest in upgrading many of its DSL customers, and is happy to have them leave to cable or -- better yet -- AT&T's own wireless services. Though offset by U-Verse broadband additions, AT&T saw a net addition of just 5,000 broadband subscribers on the quarter.
The company likely won't be making any new customer friends on the broadband front this current quarter either, given the company recently announced it intends to implement broadband caps and overage fees on its U-Verse broadband customers starting May 23. Assuming customers have options, that could act to accelerate AT&T's fixed-line broadband woes.
On the wireless front, AT&T continues to be plagued by competition from T-Mobile, who is leeching away the company's most valuable target -- postpaid wireless subscribers (who are more likely to not only pay more money each month, but actually pay their bills on time). All told, AT&T's earnings report indicates the company saw a net loss of 363,000 postpaid phone subscribers on the quarter.
In other words, AT&T's barely seeing broadband growth, is losing its most valuable wireless subscribers to T-Mobile, and is seeing a net loss in overall video subscribers. That's not exactly the kind of revolution AT&T promised when the company pitched investors on its $69 billion DirecTV acquisition plan. Still, AT&T applauded its own performance.
"It was a good start to the year," AT&T CEO Randall Stephenson said of the results. "We had solid financial results and executed well on our strategy to be the premier integrated communications provider for businesses and consumers."