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Summary:

AT&T executives have been shouting from the top of the rooftops that they are a wireless company, touting mobile as key to the carrier’s future. And while they have been making those pronouncements, Ma Bell has been quietly slowing down its U-verse deployments. Earlier today, in […]

at$tAT&T executives have been shouting from the top of the rooftops that they are a wireless company, touting mobile as key to the carrier’s future. And while they have been making those pronouncements, Ma Bell has been quietly slowing down its U-verse deployments. Earlier today, in a note to his clients, John Hodulik, an analyst with UBS Research, wrote:

AT&T has slowed the pace of its U-verse build. We initially 
expected AT&T to pass 11M incremental homes in 2009 but scaled back our 
expectations to 7M after the company pushed out its build-out plans. We now 
expect the company to pass just 4-5M new U-verse homes in 2009, down from 
9M in 2008.

Now that is a significant slowdown. So we asked the folks from AT&T to comment about the report. The company declined to comment on the “exact figures included in the UBS report, as we don’t know where their estimates came from.” According to AT&T:

Our U-verse build and expansion plans remain aggressive. We will continue expanding into new markets and turning up more households that are currently passed by our U-verse network.

In a broader sense, we announced earlier this year that given the current economic environment, we are taking a conservative approach to managing our business. With this measured approach, we now plan to pass 30M living units with our U-verse fiber network by the end of 2011 — one year later than previously planned.

In sharp contrast, Verzion continues to push ahead with its FiOS rollout. The company is also aggressively pushing its TV service. As for AT&T’s higher-speed broadband and IPTV plans — well, let’s just say they are lagging for now.

  1. Wow. Maybe Stacey’s right, and they’re going to go after low-marginal-cost DirecTV after all. Google and the Death Star – you try to crawl away, but they just suck you back in.

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  2. Can’t go into specific details but;

    1) Yes, AT&T decided late last year to increase expenditures in wireless by a crap load of money

    2) As a result of wireless focus IPTV/ U-Verse took a back seat. Also, one must realize that AT&T made a critical error in the U-verse infrastructure. They went with Microsoft and the piece of crap doesn’t scale. AT&T is running ONLY 4 customers per U-verse Server…. IMAGINE the CapEx to scale this model.

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    1. I agree with you. For the longest time I asked them about this very question and they always maintained that it would work. I think on this one Verizon made the right bet. What do they say – penny wise, pound foolish.

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  3. Many video savvy folks told AT&T MSFT wouldn’t scale – and at least a few folks within AT&T agreed. But the deal was done at the ~ CEO levels of AT&T and MSFT, so the AT&T managers had to tow the line….

    Now AT&T is trying to figure out how to make MSFT IPTV work with Apple mobile strategy..hmm

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    1. Oh this reminds me of a contortionist trying to untie himself after finding itself contorted. ;-)

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  4. Beancounters still don’t listen to nerds.

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  5. @Russ

    Yes, you’re 100% correct. This was part of a horse trade deal.

    Microsoft IPTV platform doesn’t even allow for transcoding. I really thought someone was kidding me when they told me this. But, this is not a joke as I had to shelf an offering to them…

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  6. [...] I find more surprising is that AT&T is slowing down its U-verse rollout. From the looks of it, people actually like this product (mostly because they hate their cable [...]

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  7. [...] Gigaom reports that AT&T is slowing down on the roll out of U-verse. [...]

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  8. [...] From a report at GigaOm, UBS Research analyst John Hodulik told clients that AT&T has scaled back the number of homes [...]

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  9. Verizon FiOS is slowing down too, at least in Southern California http://bit.ly/v1vyk

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  10. Anyone know if they are slowing down in Michigan? I’ve been waiting for it to pass my house. Though after reading some of the comments here, maybe it’s better if they don’t.

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