Q3: So far, so good for telco TV

So far, telco TV services are coming through one of their most critical quarters with flying colors. Verizon Communications and AT&T posted nearly identical net additions of TV subscribers during the third quarter, and together accounted for 465,000 customers signing on to telco TV offerings during the quarter. That's far more than the two largest telcos in the U.S. collected during the second quarter of 2008.

A number of smaller telco TV service providers and large cable TV companies are set to report their numbers in the days to come, so we will soon find out not only if telco TV is still succeeding across the board, but also how much of a bite the newer TV service providers are taking out of the cable TV companies.

Meanwhile, yesterday's announcement of rural telco CenturyTel's acquisition of Embarq could have some interesting TV-related implications. The buyer has been a believer in having its own TV service offering, while Embarq, like larger telco Qwest Communications, has shied away from investing in its own, branded TV service in favor of encouraging customers to use their broadband pipes for online video. Will CenturyTel change Embarq's TV strategy?

If it does, everything from service bundle competition to staightforward TV competition in Embarq's current markets will be affected. Also, the combined company could present TV technology and equipment vendors with with a larger sales opportunity, as well as the trade-off for that opportunity--a larger telco with much more purchasing power to leverage at a time when network operator across the board already may be tightening TV-related capex.

-Dan

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