Cable TV

Q4-2015: DirecTV's subscription numbers up, but ATT Entertainment reports lower video subscribers

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BENGALURU:  AT&T Inc., (ATT), claimant to the largest Pay TV services title in the world reported a net QoQ decline of 26,000 subscribers for the quarter ended December 31, 2015 (Q4-2015, current quarter) for its Entertainment Group (Entertainment). This despite the fact that its recent acquisition DirecTV reported a 1.1 percent QoQ increase (214,000 net additions) in Q4-2015 at 197.84 lakh as compared to 195.70 lakh in Q3-2015. ATT’s other Entertainment segment, the triple play U-verse (broadband internet, IP Telephony and IPTV services) reported a decline of 240,000 video subscribers in the current quarter at 56.14 lakh as compared to 58.54 lakh in the immediate trailing quarter. ATT says that its Entertainment Group focused on profitability and increasingly emphasized satellite sales, including U-verse subscribers switching to satellite.

At December 31, 2015, Entertainment had approximately 522 lakh revenue connections, compared to 344 lakh at December 31, 2014, which included:  Approximately 254 lakh video connections at December 31, 2015 compared to 59 lakh at December 31, 2014. DirecTV’s satellite subscribers as of the July 24, 2015 acquisition date was 195 lakh.; Approximately 143 lakh broadband connections at December 31, 2015 compared to 144 lakh at December 31, 2014. During Q4-2015, ATT’s Entertainment added 171,000 U-verse High Speed Internet subscribers, for a total of 124 lakh at December 31, 2015. Total broadband subscribers declined by 37,000 in the quarter due in part to fewer U-verse sales promotions; Approximately 125 lakh wired voice connections at December 31, 2015 compared to 140 lakh at December 31, 2014. Voice connections include switched access lines and VoIP connections.

“We now have a unique set of capabilities that positions us for growth and also gives us a strategic advantage in providing consumers and businesses the integrated mobile, video and data solutions they want,” said AT&T chairman and CEO Randall Stephenson.

“Our DirecTV integration is going well, and the customer response to our new integrated mobile and entertainment offers is strong. Throughout this year, we plan to launch a variety of new video entertainment packages that give customers even more choices. We’re also seeing terrific results from our expansion into the Mexican mobile market. Our LTE network now covers 355 million people and businesses, and in the quarter we had 2.8 million wireless net additions,” Stephenson added.

ATT’s Entertainment Group (Entertainment) segment includes the results of the US satellite-based operations acquired in July 2015 through the acquisition of DirectTV as well as broadband and wired voice services to residential customers in the US Entertainment revenues for the fourth quarter Q4-2015 were $13.0 billion, more than double the year-ago quarter due to the acquisition of DirecTV as well as strong growth in consumer IP broadband and video, which more than offset lower revenues from legacy voice and data products. Q- 2015 Entertainment operating expenses totalled $11.5 billion compared to $5.9 billion in the fourth quarter of 2014, largely due to the acquisition of DirecTV. The Entertainment operating margin was 11.1 percent, compared to (5.3) percent in the year-earlier quarter with satellite and IP revenue growth and cost efficiencies largely offsetting programming content cost pressure and declines in legacy services.

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