The recent talk in the television network is about AT&T phasing out U-Verse services. This decision is to push new customers to DirecTV services. Sources say that AT&T has now stopped manufacturing U-Verse set top boxes and that the prospective customers are directed to the satellite unit. The reason for this change is that the satellite set top boxes needs lesser hardware and the programming costs are low.
The intention of this shift is to make a “home gateway” for AT&T in the coming three years. This gateway will be able to consolidate all the services that are offered by AT&T and the gateway will act as a central hub to deliver videos. “AT&T is going to actively get out of the U-Verse business,” said Chris Ucko, an analyst with CreditSights Inc.
This move is also a part of AT&T’s plan to draw 2.5 billion dollars in yearly cost savings. It seems that AT&T is under pressure to increase the profits margins in the middle of a wireless price war. The current subscribers of the U-Verse services can retain their services if they wish to do so, and AT&T is offering promotions to the customers who wish to keep the U-Verse services. But the new users are now directed to the satellite packages of AT&T by their marketing team.
The decision to promote DirecTV by AT&T was reflected in the fourth quarter results. The overall loss of U-Verse customers is four percent, which is the all time loss of U-Verse. The statistics shows that about 240,000 customers canceled the U-Verse service and in the mean time, DirecTV showed a gain of about 214,000 new users.
AT&T spokesperson said that while they are concentration on DirecTV, they are not planning to shutdown U-Verse completely. “To realize the many benefits of our DirecTV acquisition, we are leading our video marketing approach with DirecTV,” said Brad Burns, an AT&T representative. “However, our first priority is to listen to our customers and meet their needs, and if we determine a customer will be better served with the U-Verse product, we offer attractive and compelling options.”