AT&T CFO says new DirecTV service will be self-installed box instead of truck roll

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AT&T plans to ship its DirecTV streaming boxes in 2019. (DirecTV)

AT&T offered some more details about its new set-top box and streaming DirecTV product while also spelling out how it will eventually end its satellite service and cut costs.

AT&T CFO John Stephens spoke Wednesday morning at the Morgan Stanley European Technology, Media and Telecom Conference and discussed DirecTV’s new premium streaming TV process.

“It’s a device that allows us to, instead of rolling a truck to the home, we roll a UPS or FedEx truck to the home and deliver a self-install box. This allows the customer to use their own broadband. We certainly hope it’s our own fiber but it could be on anybody’s broadband. And they get the full-service premium package that we would normally deliver off satellite or over our IP-based U-verse service,” Stephens said.

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Stephens said the beta is out now and that DirecTV is testing it with employees today. DirecTV expects to roll it out to customers in 2019. Once it does become available, he expected AT&T will be spending a lot less to bring subscribers onto its pay TV platform.

“The key is, as we roll that out to full production or full availability to our customers, you will see subscriber acquisition costs come down significantly because it’s the cost of that box as opposed to the cost of an employee rolling a truck, climbing the roof and installing the satellite,” Stephens said.

RELATED: AT&T reevaluating DirecTV Now channel lineups as it eyes skinnier bundles

Stephens’ comments don’t add a lot of detail beyond what AT&T disclosed during its most recent earnings call. But it does represent an acceleration in AT&T’s plans to phase out DirecTV and U-verse and replace them with an all-streaming lineup of pay TV options including DirecTV Now and WatchTV.

If the third quarter is any indication, the rate of attrition among traditional pay TV subscribers is picking up speed. Pay TV losses during the quarter total between 1.1 million and 1.2 million depending on different estimates. But analysts seem to agree that the losses were catastrophic.

“It is the largest quarterly loss ever (the first time ever that the industry lost over 1M subscribers in a quarter), and is nearly 30% larger than the loss a year ago,” analyst firm MoffettNathanson wrote in a research note.

AT&T lost a net 346,000 video subscribers, but the company still has more than 25 million subscribers. Less than 2 million of that total are DirecTV Now subscribers, so AT&T still has a significant amount of paying customers on its satellite and IPTV services.

But those numbers could begin to quickly dwindle in 2019 if AT&T begins really pushing its new set-top box and full, streaming DirecTV product.