San Antonio, TX - According to a number of reports AT&T may already be in the process of phasing-out its troubled U-Verse video service. Bloomberg News reports that the carrier has halted manufacture of the company's set-top boxes and is hoping to migrate existing U-Verse customers to recently purchased satellite TV provider DirecTV.
The company's U-Verse service has had a troubled history, which includes a steadily declining customer base and a variety of technical problems. These have included nationwide service disruptions lasting days at a time. The service has also suffered from its reliance upon legacy DSL technology in most areas.
Even in areas where AT&T has rolled-out its GigaPower fiber service which provides greater video quality and reliability, the U-Verse service has met with very limited success as compared to its cable rivals. Margins on its video programming are also quite low as compared to cable MSOs due to its low number of subscribers and resultant lack of bulk purchasing power.
By contrast its satellite-based DirecTV division has shown continued growth and high retention rates with video subscribers. It also benefits from much wider profit margins due to the purchasing power of its 39+ million subscribers. It's U-Verse video subscribers total only about 6 million nationwide.
Although the company has not yet announced plans for shuttering of the service to existing subscribers, its pre-existing contracts with a number of video suppliers could hasten its final demise for as long as another 1-2 years.