Major Businesses AT&T, Verizon see double-digit IPTV growth in Q3 2012

Michelle Clancy | 28-10-2012

IPTV continues to be a growth area for video in the United States, with the two biggest purveyors of the service, AT&T and Verizon Communications, both keeping up their records of subscriber additions in the third quarter of 2012.

AT&T saw a net addition of 198,000 U-verse TV subscribers and 613,000 high-speed Internet subscribers for the quarter—strengths that drove a 2% increase in wireline consumer revenue growth year-over-year—the telco’s best show in more than four years. U-verse TV customers totaled 4.3 million out of 7.4 million U-verse subscribers in the third quarter.

Third-quarter wireline revenue totaled $14.8 billion, a 1.6% decrease from last year’s figures, but its expenses, $12.9 billion, also decreased 2.1% year-over-year.

The news could be even better for the fourth quarter, as carrier is looking to convert at least three million of its 18 million DSL customers to its U-verse TV offerings. DSL broadband connections decreased by 42,000 in the third quarter, but the broadband average revenue per user (ARPU) increased almost 10% year-over-year as online video use has pushed users to convert to higher tiers of service.

“[Our] strong performance allows us to increase our free cash flow guidance to $18 billion or higher this year, exceeding our previous outlook by $2 billion,” said Randall Stephenson, AT&T chairman and CEO, offering full-year guidance heading into Q4.

Verizon meanwhile saw a 4.6% year-over-year increase in consumer wireline revenues, the highest in a decade; and consumer ARPU was up 10.3% year over year, to $103.86.

The company added 119,000 new subscribers for FiOS TV, ending the quarter with 4.6 million video connections. That was less than the 150,000 that the telco was expecting, but still a year-over-year increase of 15.4%. The FiOS network now claims 17.4 million households. Verizon said that it expects to add 150,000 new TV additions in the fourth quarter as well.

Together, AT&T and Verizon claim 8.9 IPTV customers, accounting for the lion’s share of the U.S. customer base. Overall in the U.S., IPTV subscribers will more than double to 18.6 million in 2017, according to Parks Associates. Parks also said that satellite’s share of the pay-TV market will drop to 30% by 2017, while cable’s share will fall to 52%, even as IPTV’s will rise to 18%.The resulting competitive shift will drive cable in particular to roll out innovative service bundles in order to retain customers.

The firm said that IPTV will thus lead the next stage in pay-TV service growth as telcos leverage their fibre-based broadband offerings to attract new customers with advanced IP-based features and higher speeds to accommodate connected set-tops and TVs. A new, big player on the scene will impact the market as well: Google is rolling out fiber-based, 1Gbps Google Fiber+TV in Kansas City.

“Cable TV providers are losing subscribers to IPTV services from AT&T, Verizon and CenturyLink,” said Jim O’Neill, Research Analyst, Parks Associates.. Satellite providers also will experience subscriber loss as telcos continue to expand fiber footprints, leverage pricing on triple- and quad-play bundles, and offer advanced TV Everywhere products. Going forward, subscriber retention will become the focus for cable and satellite providers.”

Read more: AT&T, Verizon see double-digit IPTV growth in Q3 2012 | Rapid TV News http://www.rapidtvnews.com/index.php/at-t-verizon-see-double-digit-iptv-growth-in-q3-2012.html?utm_source=newsletter_843&utm_medium=email&utm_campaign=rapid-tv-news-current-edition-2810#ixzz2Ad4SzIOv

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