Sub Growth for AT&T's U-verse TV Service Slows in First Quarter
The company reports 218,000 U-verse net additions, down from 231,000 in the year-ago period, as iPhone activations rise despite Verizon Wireless competition.
NEW YORK - Telecom giant AT&T on Wednesday reported a 218,000 net gain in first-quarter subscribers for its U-verse TV service, slightly weaker than in the fourth quarter and the year-ago period.
U-verse, which competes with cable and satellite TV services and may be showing signs of maturing, now reaches a total of 3.2 million subscribers, the company said.
In the first quarter of 2010, AT&T had recorded a 231,000 net gain in U-verse customers, and in the recent fourth quarter, the service grew by 246,000 users.
AT&T's total video subscribers, which combine U-verse and bundled satellite TV customers, now total 5.1 million, representing 20.6 percent of households served.
The iPhone also continued to be a key contributor to AT&T's financials as the recent introduction of an iPhone by competitor Verizon Wireless that ended AT&T's run as the exclusive iPhone provider had less of an impact than some had predicted.
AT&T reported 3.6 million Apple iPhone activations in the first quarter, up nearly 1 million, or 33 percent, over the year-ago period
On a conference call Wednesday morning, CFO Rick Lindner said the first quarter without iPhone exclusivity went better than expected and predicted the Verizon Wireless competition won't show bigger effects in the near future. "We’re not expecting any changes in churn rates over the next few months," he said.
Tablets and similar data-only products also helped the telecom giant's results. AT&T said it sold 421,000 of these devices to reach 3.4 million, twice as many as a year ago. Tablets made up the bulk of the growth with 322,000 additions in the quarter.
AT&T's first-quarter profit of $3.4 billion was up 36 percent from $2.5 billion in the same quarter in 2010. Revenue rose 2.3 percent to $31.2 billion.