AT&T Added Fewer U-verse TV Subscribers in Third Quarter

NEW YORK - Telecom giant AT&T on Thursday reported 176,000 net new subscribers for its U-verse TV service in the third quarter as it kicked off quarterly earnings season for pay TV providers.

The subscriber gain was weaker than the 202,000 U-verse subscribers that the company added in the second quarter and the 236,000 it added in the year-ago period. Miller Tabak analyst David Joyce had forecast a gain of 210,000, and Barclays Capital's James Ratcliffe had forecast 233,000.

The subscriber additions brought the company's total U-verse TV subscriber base to 3.6 million. AT&T's total video subscribers, which include bundled satellite TV customers in addition to U-verse users, reached 5.4 million at the end of the quarter.

AT&T's weakened subscriber growth comes as Wall Street observers have predicted improved pay TV subscriber trends for the third quarter quarter than in the seasonally weakest second quarter, which saw a loss of 458,000, according to research firm SNL Kagan. The drop followed two quarters of slight gains after declines in the second and third quarters of 2010, which were the pay TV industry's first-ever subscriber decreases and kicked off a debate over whether consumers were cutting the pay TV cord in favor of cheaper online video options.

AT&T on Thursday also said that three-fourths of U-verse TV subscribers have a triple- or quad-play option from AT&T. Average revenue per triple-play customer was almost $170, up 5.7 percent over the year-ago period.

AT&T posted a third-quarter gain of 504,000 U-verse broadband subscribers to reach a total of 4.6 million. The gain offset losses of DSL subscribers.

The company also said it has activated more than 1 million iPhone 4S devices as of Tuesday.

Email: Georg.Szalai@thr.com

Twitter: @georgszalai