AT&T said on Tuesday that it will spend more than planned on U-verse, but scaled back its penetration projections. AT&T now expects total spending on the service from January 2007 through the end of 2008 to be between $4.5 billion and $5.0 billion, up $500 million from its previous outlook.
The new spending will be used largely to deploy the service in the southeast United States, the company said.
U-verse, which delivers Internet, phone and video via twisted pair copper, is now expected to be available to about 17 million homes by the end of 2008, with significant expansion in following years. That’s down from a previous target of 18 million homes.
AT&T had made a similar change to its outlook in May, raising its spending forecast and trimming its expansion plan from an initial estimate of 19 million homes by end-2008. The company has more than 100,000 U-verse IPTV customers, as of September 2007. Ma Bell plans to make IPTV available to 8 million homes by the end of the year, up from 5 million now.
In general, IPTV Setops are at least $100 cheaper than comparable cable STBs, says Microsoft. In 2008, Microsoft will offer one fully functional set-top box and allow all the others to be lower-cost models. More than 8 million people worldwide are connected to IPTV services, with revenue expected to double between 2007 and 2010, according to MultiChannel News.
While AT&T utilizes IPTV over twisted pair, Verizon’s $23 billion Fiber Optic network (FiOS) brings fiber to the home, then distributes media around the home via coax cable and twisted pair.
At the end of the second quarter 2007, over 1 million customers received their broadband service over Verizon’s FiOS, and more than 500,000 subscribed to FiOS TV. The company has 717,000 FiOS TV customers in total, including satellite TV customers served in partnership with DIRECTV.
FiOS TV service was available to nearly 3.9 million premises in 12 states at the end of the second quarter, with an average penetration of 15.2% across all markets. Verizon hopes to get 3-4 million FiOS TV customers by 2010, representing a market penetration of 25%-30%. Verizon plans to have more than 150 HD channels by year end 2008.
