AT&T (NYSE: T) continues see its U-verse video platform shrink faster than it can grow its DirecTV satellite TV platform.
The operator said it lost 382,000 U-verse pay-TV subscribers in the first quarter, losses that were only somewhat offset by the 328,000 customers it added to its DirecTV ranks.
The heavy U-verse losses compared to a gain of 50,000 U-verse TV subs in the first quarter of 2015, which was before AT&T acquired DirecTV and shifted its growth priorities to the satellite platform.
DirecTV's gains exceeded the projected additions of around 220,000 from analysts. DirecTV added 60,000 customers in the first quarter of 2015, when it was still a standalone company.
AT&T, which paid $48.5 billion for DirecTV and closed on the acquisition last summer, said total operating revenue rose 24.4 percent to $40.53 billion, beating analysts' consensus forecasts of $40.47 billion.
Despite the overall first-quarter loss in video subs, AT&T Entertainment Group CEO John Stankey predicted the company would finish in the black for the year.
"In the second half of the year, we'll have our [DirecTV] integration efforts fully completed," he said. "Once we get our sales force fully up to speed, I see some real optimism."
Stankey said the addition of DirecTV's NFL Sunday Ticket in the fall should drive customer additions. Bundling pay-TV services with wireless offerings will also grow the video customer base, he added.
Stankey also spoke about IP-based DirecTV services launching later this year. "The attractiveness for us," he said, "is we tap into a market of 20 million customers we don't have today … Right now, the people who buy DirecTV and U-verse are high-end consumers who typically want three or four TVs connected at once. So we're able to reach a different customer base."
"Quite frankly," he added, "being able to deliver our service without the cost of a dish or a set-top is attractive."
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