Signaling that actual strong consumer demand will be there to support the telecom industry’s current convergence infatuation, AT&T CFO John Stephens said that 6 million AT&T customers have bundled wireless and video services.
Speaking earlier this week at the MoffettNathanson Media and Communications Summit, Stephens said AT&T has had success promotionally bundling linear DirecTV and virtual DirecTV Now services, along with HBO, with unlimited wireless products.
He said this bundling has resulted in a “dramatic” reduction in churn. “What we’ve seen so far is a really great response from our customers,” Stephens said, according to a Seeking Alpha transcript.
Stephens inevitably tied the discussion of combining wireless and video products with AT&T’s pending $85.4 billion acquisition of Time Warner, parent company of HBO.
“In many cases, it's more attractive to put HBO on your phone than it is to give you a free phone,” he said. “Many of our customers value the HBO more than they value a free piece of equipment."
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Meanwhile, asked by moderator Craig Moffett if virtual MVPD platform has met AT&T’s expectations nearly six months after its launch, Stephens responded affirmatively.
“Yes, it has met our expectations, actually kind of phenomenal results in December,” he said. “The promotions we put in with the [Amazon] Fire Stick and the Apple TV were overwhelming, positive, great."
Stephens added that AT&T focused on improving the platform rather than growing the customer base in the first quarter.
“Now that we’ve got that big customer base built, let's go test the system, let's go test the platform,” he said. “And let's focus our efforts in that first quarter on really improving that platform, making sure to get all the technical kinks out, making sure that customers get the best quality experience. That's what we did. We were focused on putting a lot of sales out. We want to see how the promotions reacted from a churn perspective.”