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AT&T Lays Foundation to Ditch DirecTV Satellite and U-verse TV in Favor of Online Streaming

Phillip Dampier November 14, 2018 AT&T, Consumer News, DirecTV, Online Video, Rural Broadband 6 Comments

In the not-too-distant future, AT&T will be delivering television programming to its DirecTV and U-verse TV customers over the internet instead of satellite or the variant of DSL its U-verse product uses.

Appearing at Morgan Stanley’s European Technology, Media and Telecom Conference, AT&T chief financial officer John Stephens told investors AT&T will be able to slash costs of television delivery by eventually retiring satellite service and rolling its U-verse TV into a single, self-installed, DirecTV set-top box product that will rely on broadband.

“It’s a device that allows us to, instead of rolling a truck to the home, we roll a UPS or FedEx truck to the home and deliver a self-install box,” Stephens said. “This allows the customer to use their own broadband. We certainly hope it’s our own fiber but it could be on anybody’s broadband. And they get the full-service premium package that we would normally deliver off satellite or over our IP-based U-verse service.”

AT&T employees are currently beta testing the new box and the company hopes to begin rolling it out to subscribers in 2019. Assuming they respond positively to the online streaming experience, AT&T will begin transitioning DirecTV customers away from its existing satellite platform and towards internet delivery. Stephens said the benefits are obvious: no more installers, roof-top satellite dishes, and service calls to deal with signal problems.

“The key is, as we roll that out to full production or full availability to our customers, you will see subscriber acquisition costs come down significantly because it’s the cost of that box as opposed to the cost of an employee rolling a truck, climbing the roof and installing the satellite [dish],” Stephens added.

The transition to less costly delivery platforms may be just in time for AT&T, which saw historically large subscriber losses on its DirecTV satellite platform. Other providers reported significant losses as well, demonstrating cord-cutting is a growing trend in the pay television industry. DirecTV’s expensive fleet of satellites carry not only nationally distributed networks but hundreds of local television stations beamed regionally to customers. The economics of satellite television may become questionable if customers continue moving away from linear, live television. Internet delivery services are much less costly and offer more robust on-demand viewing options.

Rural Americans may face the consequences of any transition. They are least likely to have suitable broadband service capable of supporting DirecTV’s streaming video service and could lose access to television altogether if AT&T (and Dish) retire their satellite fleets. That may be a small concern to AT&T, which has 25 million subscribers, the vast majority of which have access to broadband internet.

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JOHN S PINNOW
1 year ago

This is well and great. We went from U-verse to direct-tv and now in the next 10 years another shake up. Well I am hoping AT&T will improve its own internet platform. With no TV traffic
on the network its tolerable. However, unless AT&T can deliver gigabit speeds everywhere people aren’t going to buy it.

Just another headache.

Matt M
Matt M
1 year ago

Those of us in the rural areas just keep getting screwed.

Fred Pilot
1 year ago

“Rural Americans may face the consequences of any transition. They are least likely to have suitable broadband service capable of supporting DirecTV’s streaming video service and could lose access to television altogether if AT&T (and Dish) retire their satellite fleets. That may be a small concern to AT&T, which has 25 million subscribers, the vast majority of which have access to broadband internet.” AT&T could conceivably attempt to serve landline redlined prems in its nominal service area with its fixed prem wireless 4G LTE bolt on: https://www.att.com/internet/fixed-wireless.html Question of course is whether that has the bandwidth to support many prems… Read more »

EJ
EJ
1 year ago

As with almost everything in Telecommunications I have a feeling of over-promising. While this is beneficial to them they don’t want to lose customers to Dish and if you totally discontinue dish installation you will lose customers. Also they are assuming a ton in that they can just ship a self installation package and think people some people won’t require an installer to come and help them. It is a sound plan in my opinion, but the end of satellite dishes is a long ways away if the current trend of broadband expansion continues.

Daryl W Keith
Daryl W Keith
1 year ago

In regards to the rural area’s, AT&T has already been working on whats called “Project Air GIG”. That will open up Wireless Broadband in rural area’s with more than adequate Bandwidth to run the new DirecTV IP platform!! I’m super excited about this, as this will open up so much opportunity to those who have been without for so long. Where I worry, is that with the transition to a better, more reliable platform, what will the terms be like? Hopefully, the 2-year contract will go away and move to the more customer friendly 1-year agreement. Also, hopefully the price… Read more »

Anuradha
10 months ago

Amazing piece of information..thank you for sharing

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