U-verse adds can’t stop connection erosion, AT&T reveals

AT&T (NYSE:T) said it added 439,000 U-verse high-speed Internet subscribers in the second quarter of this year to reach a total of 4.1 million. It also added 202,000 U-verse TV subscribers to reach 3.4 million in service. But neither increase was enough to prevent total wireline connections from decreasing.

The carrier announced its second quarter 2011 results July 21 (see “Wireless gains highlight AT&T second-quarter 2011 results”). The U-verse performance was part of what AT&T called “stable” wireline business performance for the quarter.

AT&T said that U-verse deployment now reaches 29 million living units. Companywide penetration of eligible living units is 15.5 percent, and overall penetration is 25.0 percent across areas marketed to for 36 months or more. AT&T's total video subscribers, which include both U-verse and bundled satellite customers, reached 5.3 million at the end of the quarter, representing 21.5 percent of households served.

AT&T said its U-verse Internet attach rate continued to run above 90 percent during the quarter, and 55 percent of new subscribers took AT&T U-verse Voice. Three-fourths of U-verse TV subscribers have a triple- or quad-play option from AT&T, the company added. ARPU for U-verse triple-play customers was $170, up 8.3 percent year over year.

At the end of the second quarter, AT&T said it had 16.5 million total wired consumer broadband connections, up 3.3 percent over the past 12 months but down slightly from first-quarter 2011 levels, which the carrier attributed to seasonality. Approximately 70 percent of consumers have a broadband plan of 3 Mbps or higher, AT&T revealed.

However, the growth in U-verse’s popularity has not fully compensated for an overall decline in wireline connections. AT&T saw a decline in total consumer revenue connections during the quarter, primarily because of declines in traditional voice access lines at a greater rate than the additional U-verse TV, broadband and VoIP connections. Total consumer revenue connections at the end of the second quarter were 42.5 million, compared with 44.3 million at the end of the second quarter of 2010 and 43.1 million at the end of the first quarter of 2011.

U-verse IP revenues now make up 49.2 percent of AT&T's wireline consumer revenues, the company revealed, versus 40.4 percent in the year-ago quarter.