Blog Post

AT&T's Slowing Down on U-verse

Stay on Top of Emerging Technology Trends

Get updates impacting your industry from our GigaOm Research Community
Join the Community!

at$tAT&T (s 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.

18 Responses to “AT&T's Slowing Down on U-verse”

  1. Well, I’ll contribute here from the consumer’s end. It was not ready to market when it did. My U-Verse Phone Salesman was way short of reality. Installation Day I told the miffed installer to yank it! 7 days/8 installers later they finally made all of it work. Then came three sets of no phone service for ten days at a time; let go of cell from spending much $$$ on calls over UV! Nobody mentioned my AT&T DSL email address would NOT be accessible later after they set me up with my UV ID mail address so I loose important business whichever one their system picks up as THE UV mail. Therefore, can’t put it on auto payment. The list goes on & on. In short, it’s been a Royal Pain.

  2. UverseTEch

    Uverse could be a great product I have so many great suggestions for them. A move away form microcrap is the the first, I mean how hard would that be? Fttn does not ruin uverse. They have gone about things wrong and now are bleeding money and back peddling. The slow down of the economy could have been the best thing for At&T/Uverse …But they played their cards wrong. Now Its time to pay up.

  3. T-imp

    There’s other factors in the U-verse deployment besides costs and the server requirements. The pending union strike would cause the U-verse contractors to be used for basic landline work. More importantly, the copper upgrades is facing high resistance in city governments. The corner neighborhood nodes are unsightedly; and the yard boxes are hokey with green plastic covers. City managers are viewing Verizon as a healthy competitor to cable for advancing the community’s technology. AT&T is perceived as a revenue predator exploiting the residents. And AT&T continues the telephone company marketing. Their new small business bundle was announced as including CallerID. Who is going to buy IPTV from a company still focused on landline calling features?

    • Tech head

      To point out an error, a good deal of uverse techs are union members who are involved in the current labor negotiatiomns. If CWA strikes then most of the U-verse techs will be out on strike along with the techs who handle pots and their office workers.

  4. 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.

  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…

  6. 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

  7. 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.

    • 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.

  8. 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.