Home » AT&T » Recent Articles:

Investors Seek Class Action Lawsuit Against AT&T for Lying About DirecTV Now

Phillip Dampier May 23, 2019 AT&T, DirecTV Now, Public Policy & Gov't No Comments

As AT&T bleeds satellite and streaming TV customers, a new class action case is planned on behalf of investors who feel ripped off after buying AT&T stock on assurances from top executives that the company was aggressively seeking a leadership role for its DirecTV Now streaming service.

According a complaint from the Schall Law Firm, AT&T made false and misleading statements to the market and caused some investors to lose more than $100,000 from the declining value of AT&T stock.

DirecTV Now entered the streaming business with a generous package of TV channels and a significantly lower price than some of its competitors. It also offered high value promotions including free equipment, and for some AT&T wireless customers, free service. By October 2018, DirecTV Now grew to a peak of 1.85 million customers.

But several weeks later, AT&T CEO Randall Stephenson announced the service was cutting back on promotions and planned to raise prices and cut back on the number of channels to boost profits.

“This resulted in existing customers leaving the service when their discount expired, and new customers avoiding the service altogether based on high prices,” the Schall Law Firm said in a press release. “Based on these facts, the company’s public statements were false and materially misleading. When the market learned the truth about AT&T, investors suffered damages.”

Publicly traded companies cannot lie or deceive investors in public statements about the company or its performance, according to securities laws. Shareholders are entitled to prompt and forthcoming disclosures about materially adverse events that could significantly impact on the performance of a company. AT&T has already lost over 500,000 TV customers in the first quarter of 2019. Stephenson this month told investors at a J.P. Morgan Conference he now expects more customer losses for the rest of 2019, including more than a half-million more anticipated cancellations during the second quarter of this year. Stephenson called it a “customer cleanup” that will purge “low value” subscribers.

Investors with significant losses were encouraged to reach out to the law firm before May 31, 2019.

AT&T Expects to Offer “Nationwide” 5G and Fiber Broadband Service Within 3-5 Years

Stephenson

AT&T CEO Randall Stephenson on Tuesday told investors that AT&T will deploy a combination of fiber optics and 5G wireless and be able to sell a “true, high-speed internet network throughout the United States” within the next three to five years.

“In three to five years out, there will be a crossover point,” Stephenson told investors. “We go through this all the time in industry. 5G will cross over, performance wise, with what you’re seeing in home broadband. We’re seeing it in business now over our millimeter-wave spectrum. And there will be a place, it may be in five years, I think it could be as early as three, where 5G begins to actually have a crossover point in terms of performance with fiber. 5G can become the deployment mechanism for a lot of the broadband that we’re trying to hit today with fiber.”

Although the remarks sound like a broadband game changer, Stephenson has made this prediction before, most recently during an AT&T earnings call in January, 2019. Stephenson told investors he believed 5G will increasingly offer AT&T a choice of technology to deploy when offering broadband service to consumers and businesses. In high-cost scenarios, 5G could be that choice. In areas where fiber is already ubiquitous, fiber to the home service would be preferred.

Stephenson’s predictions about nationwide service will depend in part on the commercial success of millimeter wave 5G fixed home broadband, which will be required to satisfy broadband speed and capacity demands. Verizon Wireless has been offering fixed 5G in several markets with mixed results. The company’s early claims of robust coverage have been countered by Verizon’s own cautious customer qualification portal, which is more likely to deny availability of service to interested customers than offer it.

But Stephenson remains bullish about expanding broadband.

“So all things considered, over the next three to five years, [with a] continued push on fiber, 5G begins to scale in millimeter-wave, and my expectation is that we have a nationwide, true, high-speed internet network throughout the United States, [using] 5G or fiber,” Stephenson said.

Whether anything actually comes of this expansion project will depend entirely on how much money AT&T proposes to spend on it. Recently, AT&T has told investors to expect significant cuts in future investments as AT&T winds down its government-mandated fiber expansion to 14 million new locations as part of approval of the DirecTV merger-acquisition. In fact, AT&T’s biggest recent investments in home broadband are a result of those government mandates. AT&T has traditionally focused much of its spending on its wireless network, which is more profitable. For AT&T to deliver millimeter wave 5G, the company will need to spend billions on fiber optic expansion into neighborhoods where it will place many thousands of small cell antennas to deliver the service over the short distances millimeter waves propagate.

AT&T could sell a fixed 5G broadband service similar to Verizon Wireless, confine its network to mobile applications, or offer fixed wireless service to commercial and manufacturing users in selected areas. Or it could offer a combination of all the above. AT&T will also need to consider the implications of a fiber buildout outside of its current landline service area. Building fiber optic networks to provide backhaul connectivity to AT&T’s mobile network would not antagonize its competitors nearly as much as the introduction of residential fixed 5G wireless as a home broadband replacement. The competitive implications of that would be dramatic, especially in communities skipped by Verizon FiOS or stuck with DSL from under-investing independent telephone companies like CenturyLink, Frontier, and Windstream. Should AT&T start selling 300+ Mbps fixed 5G wireless in these territories, it would cause significant financial distress for the big three independent phone companies, and could trigger a competitive war with Verizon.

Wall Street is unlikely to be happy about AT&T proposing multi-billion dollar investments to launch a full-scale price war with other phone and cable companies. So do not be surprised if AT&T’s soaring rhetoric is replaced with limited, targeted deployments in urban areas, new housing developments, and business parks. It remains highly unlikely rural areas will benefit from AT&T’s definition of “nationwide,” because there is no Return on Investment formula that is likely to work deploying millimeter wave spectrum in rural areas without heavy government subsidies.

For now, AT&T may concentrate on its fiber buildout beyond the 14 million locations mandated by the DirecTV merger agreement. As Stephenson himself said, “When we put people on fiber, they do not churn.” AT&T has plenty of runway to grow its fiber to the home business because it attracts only about a 25 percent market share at present. Stephenson believes he can get that number closer to 50%. He can succeed by offering better service, at a lower price than what his cable competitors charge. Since 5G requires a massive fiber network to deploy small cells, there is nothing wrong with getting started early and then see where 5G shakes out in the months and years ahead.

14,000 Consumers Cut Cable TV’s Cord Every Day Says New Study

The top 10 service providers in the United States collectively lost over 1.25 million paid television customers in the first three months of 2019, providing further evidence that cord-cutting is accelerating.

Multiscreen Index estimates if that trend continues, an average of 14,000 Americans cancel their paid cable or satellite television service daily.

AT&T suffered the greatest losses, primarily from its satellite television service DirecTV. More than a half-million satellite customers canceled service in the first quarter of the year. AT&T lost another 89,000 streaming customers as news spread that the service was increasing prices and restricting generous promotions to attract new subscribers. DISH Network, DirecTV’s satellite competitor, also lost more than 250,000 customers.

Many cable television providers announced this quarter they would no longer fret about the loss of cable TV customers, and many have dropped retention efforts that included deeply discounted service. As a result, customers are finding it easier than ever to cancel service. Comcast lost 107,000 TV customers, while Charter Spectrum lost 152,000. Spectrum recently increased the price of its Broadcast TV Fee to $11.99 a month and has pulled back on promotions discounting television service.

United States
Service Change
quarter
Subscribers
(millions)
1,280,200 81.90
AT&T TV/DirecTV -544,000 22.36
Comcast -107,000 20.85
Charter Spectrum -152,000 15.95
DISH Network -266,000 9.64
Verizon FiOS -53,000 4.40
Altice USA -10,200 3.30
Sling TV 7,000 2.42
DirecTV Now -89,000 1.44
Frontier -54,000 0.78
Mediacom -12,000 0.76
Source: informitv Multiscreen Index.

“There were losses across the top 10 television services in the United States, with even the DirecTV Now online service losing customers following previous heavy promotion. Between them, they lost over one-and-a-quarter million subscribers in three months. They still command a significant number of customers but the rate of attrition has increased,” said Dr. William Cooper, the editor of the informitv Multiscreen Index.

The total figures for the quarter show roughly 81.90 million Americans are still paying one of the top-10 providers for cable or satellite television service, amounting to less than 70% of television homes — a significant drop. Privately held Cox Communications is excluded because it does not report subscriber numbers or trends.

AT&T and Verizon: Costs Dropping 40% a Year

Phillip Dampier April 30, 2019 AT&T, Broadband "Shortage", Broadband Speed, Verizon 2 Comments

Although continued traffic growth would seem to indicate companies like AT&T and Verizon will need to continue major spending initiatives to keep up with demand, technological advancements and upgrade programs have made networks more efficient than ever, allowing AT&T and Verizon to report cost declines as much as 40% annually.

Wireless One’s Dave Burstein spoke with Andre Fuetsch, AT&T’s chief technology officer about current telco cost trends. Feutsch said a lot has changed with AT&T’s networks over the last several years.

“We’ve gone from 10 gigabits to 100 gigabits to now 400 gigabits on our fiber,” Feutsch told Burstein. “MIMO and massive MIMO are extremely productive. Yes, I think 40% per year is a reasonable estimate of how our costs are going down. AT&T’s leadership in open white box and SDN will continue to drive that number higher, which is needed as network demand increases.”

Burstein notes Verizon similarly estimated their costs were also falling about 40% annually.

“I have been able to confirm that the 40% Verizon efficiency savings figure is on target if not exact,” Burstein said. “You can replicate my thinking. Traffic has been growing 40% per year. Sales have been roughly flat for the similar time period. If productivity growth hadn’t been a similar 40%, profits likely would have trended down. In fact, they have been flat or slightly increasing.”

While AT&T has been embarked on a costly major fiber network buildout in its local phone service territory, Verizon has been focused on rebuilding and modernizing its core network. The “One Verizon” project is retiring a large percentage of the 200,000 legacy routers, switches, and other hardware in use across Verizon’s network and installing about 20,000 very efficient network box replacements. Verizon estimates its first year cost savings are about 50%.

Although network traffic growth, expansion, and upgrades come at a cost to carriers, technological improvements are covering much of those costs by making networks more efficient and capable of carrying much more data than ever before. When companies talk about their network investments in terms of justifying rate increases, that clearly does not tell the full story.

Verizon Suspends Planned $10 Extra Charge for 5G Service

Verizon Communications has indefinitely suspended plans to charge customers an extra $10 a month for access to Verizon’s extremely spotty and uneven 5G service, which launched earlier this month in Chicago and Minneapolis.

Early adopters were told Verizon would waive the extra $10 fee for the first three months of service. But after receiving mixed reviews about Verizon’s 5G performance and very limited coverage area after launch, Verizon decided to withdraw the charge until further notice.

“This is some of the blowback you get from being first” in offering smartphone 5G service, John Hodulik, an analyst at UBS Group AG, told the Wall Street Journal. “It didn’t make sense to charge people extra money for a service that they’re rarely going to use.”

AT&T’s CEO Randall Stephenson sent signals to shareholders AT&T was also considering charging a premium rate for customers upgrading to 5G technology in the next two or three years.

Search This Site:

Contributions:

Recent Comments:

  • Larry Fostano: BBB and or your Attorney General. I say , lest get a petition going to submit also....
  • Ryan: Just tried this, worked like a charm. Said I was switching to streaming because of the price. Right away they offered $40 for choice for 12 months....
  • EDWIN Dennis: I ordered a liveware antenna and amplifier: they tried to charge me for 3 antennas.. I got that straight at the bank. Now, no response from liveware; ...
  • j lundberg: after forcing the purchase of their phone- i paid taxes and 1st months service in January ,then find out the phone will not be here before Dec. 29 as ...
  • John Michel: How can one stop SPECTRUM from sending filthy, immoral emails to my email address. I went to settings to set up a block on these filthy emails. Does...
  • Catherine Harris: Where can I find COUT TV on Frontier?...
  • Roger: I read about this once. I think it was in the book 1984....
  • Roger: On top of that, you know the cable companies are going to price the individual stations in such a way that ten or fifteen of them will be the same pri...
  • Oddest Artist: Agreed. Nearly all deals from programmers (and broadcasters) require equal distribution and/or carriage of their services. Providers are bound contrac...
  • Doug: Good luck with that. Forcing a cable company to sell channels a-la-carte will need the consent of the content owner (i.e. - Big Media). And the cont...
  • L. Nova: Blame Wall Street and their relentless greed led by people such as Craig Moffett who have hissy fits when companies such as Verizon want to spend the ...
  • Phillip Dampier: Canada has three national carriers and they pay considerably more for cell service than we do as a result. Three large carriers tend to form a comfort...

Your Account: