AT&T made two big announcements last week, which don't bode well for the IPTV service pacesetter: U-verse will cost the company $1.4 billion more than originally thought and the company will pass 1 million less homes than it previously predicted: now only 18 million by year-end. The company now plans to spend as much as $6.5 billion on the IPTV rollout by 2008.
Reports indicate that the cost increase comes from adding more servers, which are needed as the service provider ramps up its HD offerings. "This additional investment will further strengthen our service, which already has numerous advantages over cable," an AT&T spokesman said. "We're very happy with the progress we're seeing with U-verse."
The decreased subscriber outlook comes as AT&T battles intransigent municipalities for franchise licenses in its old BellSouth territories. The company is also finding it difficult to hire qualified technicians, according to the WSJ report. AT&T's IPTV subscriber count now stands at about 20,000 nationwide, while it has passed about 2.8 million homes thus far. Verizon has 348,000 subscribers to its FiOS TV offering as of the end of last quarter, which saw a net add of 141,000 subs.
For more on the AT&T U-verse rollout:
- see this report from the WSJ (sub. req.)