Baseball sage Satchel Paige once said: "Don't look back, something might be gaining on you." In the case of Verizon (NYSE: VZ) and its FiOS TV service, that "something" is AT&T's (NYSE: T) U-verse TV, and it's definitely gaining ground. In the fourth quarter, the telco, for the 10th consecutive quarter, outgained its rival.
IHS Screen Digest said the 208,000 subscribers picked up by AT&T in the fourth quarter outnumbered Verizon's 194,000 gain and gave the company an edge of more than 103,000 subscribers for the full year.
AT&T U-verse currently has 3.79 million subscribers, about 400,000 fewer than Verizon's 4.17 million. Both operators saw double digit year-over-year growth, with AT&T tallying a 237 percent growth spurt and Verizon 20 percent.
Verizon launched its service in 2004. U-verse launched two quarters later in 2005 and maintained a 1-million subscriber lead until 2008.
IHS predicts that the number of U-verse TV subscribers will pass the number of FiOS TV subscribers at the end of 2013, with the operators counting 5.04 million and 5.03 million subscribers respectively.
"U-verse's strong growth relative to FiOS is setting the stage for AT&T to take over the lead from Verizon by a nose at the end of 2013," said Tom Adams, senior principal analyst for U.S. media at IHS.
AT&T already has the edge in the number of households passed, 30 million compared to 16.5 million to Verizon, and both companies have said that their initial buildout to offer their services is likely at an end for now. For at least the near future, both say they plan to try to increase their penetration rates in the areas where their services are available.
AT&T has a penetration rate of 16 percent for dwelling units reached overall but enjoys a 25 percent penetration in places where it has been marketing for 36 months or more.
Verizon in the fourth quarter likely received a boost from a backlog of 100,000 installations which were incurred after an internal strike was settled in mid-September, along with the resumption of initiatives following an East Coast hurricane that delayed new installations.
And although Verizon is predicted to lose its dominance in the space to AT&T by 2013, the company should continue to experience healthy growth, said IHS.
The research company said Verizon this quarter should pass Charter Communications to become the sixth-largest U.S. multichannel operator.
Both operators, meanwhile, saw similar ARPU from subscribers, in the fourth quarter, with AT&T U-verse video customers ARPU at $84.11, compared to Verizon's $84.33 per month.
For more:
- see this release
Special Report: IPTV 4Q 2011 earnings
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