AT&T U-verse subs top 9.4 million in Q2, 45 Mbps speeds coming soon

July 23, 2013 | By Sue Marek

AT&T's (NYSE: T) U-verse business continues be a feather in the telecom operator's wireline cap. The company reported U-verse revenues were up 30.1 percent year-over-year, with the IP service now contributing more than half of the wireline consumer business revenues. In addition, U-verse total subscriber count topped 9.4 million in the quarter.

U-verse revenues, including business, were $5.6 billion, up 2.4 percent from a year ago and up 1.8 percent from the first quarter 2013. U-Verse now represents 51 percent of consumer revenues, up from 41 percent in the same quarter last year.

During the company's earnings conference call, AT&T CFO John Stephens said that U-Verse is now a $12 billion revenue stream for the company. "Not bad for a business that just started seven years ago," Stephens noted. "We know how to build and scale new businesses," he added.

Interestingly, the company also reported that average revenue per user for U-Verse triple play customers is more than $170.  And overall ARPU is up 9 percent year-over- year.

Regarding Project VIP, the $14 billion initiative AT&T embarked upon late last year to upgrade its wireline network to an all IP-infrastructure, Stephens said that the company plans to boost  U-Verse speeds to 45 Mbps in the coming months, and then progress to 75 Mbps and eventually up to 100 Mbps speeds. In addition, he said that the company will increase U-verse broadband locations by 1.3 million this year.

Here's a rundown of other key metrics in the quarter:
Financials: AT&T's wireline revenue was $14.8 billion, down 0.9 percent vs. the year-ago quarter and up 0.8 percent sequentially. Operating expenses were $13.1 billion, up 1.3 percent vs. the second quarter 2012.

Broadband: U-Verse added 641,000 broadband subs in the quarter for a total reach of 9.1 million subs. The company had a net loss of 61,000 wireline broadband subscribers .  U-Verse high-speed internet customers now represent 55 percent of all wireline broadband customers compared with 50 percent in the year-ago quarter.
About 50 percent of U-Verse customers have plans with speeds delivering up to 10 Mbps or higher, up from 52 percent in the year-earlier quarter. More than 90 percent of new U-Verse TV customers also signed for high-speed Internet.

Video: U-Verse video subs increased 233,000 in the quarter with total customers now at more than 5 million. In addition, U-Verse TV penetration is at 20.1 percent at the end of the quarter and is growing.

Business services:  AT&T's business services revenue was $8.9 billion, down 2.2 percent vs. the year-ago quarter but up slightly from the first quarter of 2013. Stephens noted that the economy continues to be challenging but AT&T saw some growth in advanced business solutions, which includes VPN, Ethernet and hosting services, which grew 15 percent vs. the year-earlier quarter, and those services represent a $8.4 billion revenue stream.