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In its 10-Q filed earlier today, AT&T (NYSE: T) admitted its expensive U-Verse video rollout isn’t going quite as planned, upping 2007-08 spending estimates by $500 million and trimming by another million the number of homes it expects to pass by the end of 2008.
AT&T said it will spend $4.5-$5 billion on U-Verse between January 2007 and the end of 2008. At Q3’s end, U-Verse had yet to break the 150,000-subscriber mark, although the 126,000 subs more than doubled Q2’s 51,000. (By far, the bulk of AT&T’s 1.9 million video subs come from its satellite deals with EchoStar (NSDQ: DISH) and DirecTV.) By Sept. 30, AT&T had a footprint of 5.5 million “living units” and was marketing to 40 percent of them.
Reuters notes, the spending forecast is $500 million higher than its previous estimate, while the number of total homes passed is down from guidance of 18 million. The 18 million-home figure already represented a cut from a previously stated 19 million. The weakened forecast is likely to stoke sentiment that the company may be better off pursuing a satellite strategy and perhaps, acquisition of EchoStar.