Tuesday, December 11, 2007

ATT's New U-verse IPTV Forecasts

ATT made a number of predictions for its IPTV U-verse service at its analyst conference. The full presentation is on its website. ATT expects that its U-verse service has the "potential to be a multi-billion dollar revenue stream over next two to three years". The company expects the service to grow to more than 1 million subscribers in service by the end of 2008. It had 126 thousand subscribers at the end of 3Q07. It is still forecasting that it will be installing 10 thousand new subscribers per month by the end of 2007 and expects this rate to be 40 thousand per week by the end of 2008.

ATT is maintaining its forecast that the service will pass 17 million homes by then end of 2008, up from 5.5 million homes at the end of 3Q07. It announced a new goal of 30 million homes passed by the end of 2010. At this point the service would pass 50 percent of living units and 33 percent of businesses in 22 states. It expects the cost of home passed to be in the low $300's.

ATT plans to increase its maximum data speed with U-verse from 6 Mbps to 10 Mbps as well as support 4 HD channels and 2 VoIP lines with a total budget of 36.4 Mbps. This compares to today's budget of 21.4 Mbps with 1 HD and 3 SD channels, 6 Mbps of data, and 2 VoIP lines today. Both services will be available to 80 percent of the homes passed not including the former BellSouth territory. The 36.4 Mbps budget will require pair bonding while the 21.4 budget can be provided over a single pair. It expects to start offering a bonded service by 2H08.

ATT expects that the average installation time for the U-verse service will decrease from 6.4 hours today to 5.3 hours with experienced technicians. Its target is to bring this time under 5 hours. Its CPE cost per customer is about $550 today and is expected to drop to somewhere around $400 in 2010.

ATT plans to introduce TV ad insertion to its U-verse service in 2009.

ATT continues to make aggressive forecasts for its U-verse IPTV service. It will have to put in a lot of effort to pass 17 million homes by the end of 2008. To achieve this it will need to pass more than 750 thousand homes per month. To go from 17 million homes by the end of 2008 to 30 million by the end of 2010 will require a rate a bit higher than 525 thousand per month.

ATT's goal of 1 million U-verse subscribers by the end of 2008 seems doable if it does pass 17 million homes. That is a subscription rate of about 6 percent.

No comments: