| AT&T's Lindner: Wireless + DSL Bundle Doing Great |
| Written by Dave Burstein |
 “Our stand alone DSL product which about 50% of the time is bundled with wireless has been very strong for us. We haven’t been running any significant promotional activities I think in the last few quarters.” (Seeking Alpha) De la Vega essentially dropped the premium for “naked DSL” hoping to keep revenue when customers dropped landlines, and the results proved strong. De la Vega before taking over all of T ran Cingular Wireless, but I met him first as BellSouth's “DSL guy.” BellSouth was the most successful of the bells in DSL by far, one reason for Ralph's rapid rise to the top. Intelligence, common sense, and a gracious personality also played a role, of course, but it was the results he achieved in DSL that led Duane Ackerman to tell me De la Vega had no limits on what he could achieve at the company.
U-Verse is up 284K on top of a 12 month $30-30-30 triple play promotion and many free “whole home” DVRs. Lindner notes a remarkable 60% are coming from competitors, primarily cable. We are still in the early stage of U-Verse, when the 10% of customers who hate their cable company come over. The U-Verse results are despite a nearly 1/3rd decline in capital spending, including a reduction in the number of homes passed by U-Verse to less than 1M. U-Verse in 2008 was planned at 1.5M/quarter, although they fell about 15% short. Q1 capex was $3,173M, below depreciation in both wireline and the overall company and almost $1B less than any other quarter in the last 2 years. Wireline segment “income” was down 27% although is still over $2B. I missed an announcement in January that U-verse TV and DIRECTV were the first video service providers to receive certification for their set-top boxes under the U. S. Environmental Protection Agency’s ENERGY STAR program for video providers, a good thing. Jennie's Time Warner box requires far too much electricity. T also deserves credit for the clarity on something others obscure. “471,000 net increase in total broadband connections — wireline and wireless LaptopConnect cards — to reach 16.7 million in service,” contrasts with many who inflate their “broadband” statistics by adding wireless without a clear note. The Chairman of the FCC misunderstood a figure like that when presenting to Congress. He corrected things in later comments, which didn't stop a second commissioner from making the same mistake. $50 “all-inclusive” plans from lesser brands, including Sprint's prepaid line, are the big story in U.S. mobile. The cartel has kept prices high since AT&T Wireless and Nextel disappeared a few years ago. The U.S. had been very proud a few years ago that mobile prices were much lower here, because of the 6+ company competition. That gap is now much less, with a tripling of SMS charges and high data costs creating an actual price increase. AT&T's 1.6M iPhone 3G activations dwarfed their 875K postpaid net adds, incidentally, suggested that wireless would be flat to down without the hot product. Verizon is clobbering T (except the iPhone,) Sprint, and T-Mobile, mostly on their reputation as a better network. U.S. wireless is perhaps the worst in the developed world, with frequent call drops and connect failures. Simply working most of the time shouldn't be an unreasonable expectation, but even Verizon phones often have problems. |
