AT&T (NYSE: T) continues to make inroads with U-verse. The company added 200,000 U-verse video subscribers in the first quarter of 2014 and noted that churn for the product is very low. In addition, AT&T touted the fact that U-verse is now a $14 billion annualized revenue stream for the company, growing at almost 30 percent year-over year.
On an earnings call with investors, AT&T CFO John Stephens called U-verse's growth a 'transformation," noting that not long ago U-verse was a declining revenue stream for the company, but is now growing. He said that U-verse revenue in the quarter was up 4.3 percent over the year-earlier period and U-verse now represents 60 percent of consumer revenues.
In terms of broadband subscribers, U-Verse added 634,000 high-speed Internet subscribers, including 64,000 in the business segment. U-Verse broadband counted 11 million broadband customers in the quarter. AT&T said total broadband average revenue per user was up 9 percent in the quarter.
Overall, AT&T reported consolidated revenue of $32.5 billion in the first quarter, up 3.6 percent vs. the year-earlier period. Stephens said this was the company's strongest growth in more than two years. AT&T's operating expenses were $26.2 billion vs. $25.4 billion, and its operating income was $6.3 billion, up from $5.9 billion in the year-earlier period.
Interestingly, Stephens provided some additional insight into the AT&T's announcement yesterday that it is planning to expand its U-verse GigaPower service to up to 100 cities and municipalities, including 21 major metropolitan areas. He said the company is asking for communities to step up and apply for the service, and the biggest qualifier is that those communities have suitable network facilities and show the strongest demand for the service.
Stephens said that the take rates for GigaPower service in Austin, where AT&T already offers GigaPower service, have been strong and so have the quality scores from consumers. Stephens said that because the company has been able to build where the customers are, that has helped drive demand and make it a financially viable product. "We can build where the demand is and see higher penetration and higher returns to support that build," he said.
For more:
- see this press release
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