AT&T (NYSE: T) has stopped manufacturing set-top boxes for its U-verse pay-TV service and is looking to migrate all of its video customers to its DirecTV platform, according to Bloomberg.
The move, the news service said, comes as AT&T is trying to — within the next three years — deliver all of its home services through a unified gateway.
An AT&T rep gave this statement: "To realize the many benefits of our DirecTV acquisition, we are leading our video marketing approach with DirecTV. However, our first priority is to listen to our customers and meet their needs, and if we determine a customer will be better served with the U-verse product, we offer attractive and compelling options."
AT&T added 214,000 DirecTV customers in the fourth quarter, but shed 240,000 U-verse video subscribers during the period.
"The DirecTV subscriber additions were stronger than expected … but the U-verse losses were much worse," said MoffettNathanson analyst Craig Moffett, summing up AT&T's fourth quarter pay-TV performance.
"Financially, this is a good trade; a big reason AT&T [acquired DirecTV] was to get out from under burdensome programming costs that plague U-verse. Still, this result is, in aggregate, a clear disappointment," Moffett added.
AT&T CEO Randall Stephenson said AT&T is still getting its "legs under it" for selling and installing DirecTV. "We don't even have our installation work force up to full speed," he said.
He added that the relationship between DirecTV and U-verse subscriber growth will get better.
"We're doing some things to shore up the U-verse base," he said. "We are focused on the satellite product … But we did some things on pricing to help mitigate the U-verse churn."
Specifically, Stephenson said AT&T tied unlimited wireless plans to U-verse in promotions.
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