AT&T’s TV service comes to Wal-Mart; battle for new subscribers continues


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Just when you were ready to give up cable altogether and watch TV on your computer, telecommunication companies start aggressively rolling out fast new ways to get TV, Internet and voice services. And they really, really want your business.

Today, AT&T announced it would begin selling its AT&T U-verse TV and AT&T U-verse High Speed Internet services in Circuit City and Wal-Mart stores across the country. U-verse uses a hybrid network of fast fiber-optic and conventional copper wires to bring TV, Internet and voice services to your home. Bundles start at $69 a month.


“As AT&T U-Verse continues to expand availability and customer growth, we want to let new customers know about a new choice in a big way,” said spokeswoman Katie Farnham. Being in stores such as Wal-Mart will help educate customers about the service, she said, and hopefully bring in some new subscribers. It’s trying to sweeten the deal by offering $200 cash back to customers who order certain U-verse packages online.

Why the big deals and incentives? AT&T is duking it out with Verizon’s FiOS and cable companies such as Time Warner Cable to get into new homes as customers frustrated with the relatively slow speeds of DSL look for faster service. They’re doing it at a tough time. Broadband service providers are having trouble recruiting new subscribers, due to “a soft housing market, a weakened economy, broadband market maturity, and predictable seasonality,” according to Ben Piper, director of multiplay market dynamics at research firm Strategy Analytics.

Just about every cable and phone company saw significantly fewer new subscribers in the second quarter of 2008 than they had the same time the previous year, according to Piper’s data. AT&T had 90% fewer new broadband subscribers than it had in the second quarter of 2007. Qwest saw its number of new broadband subscribers fall 70%.

“A critical success factor, then, for the telcos will be to step up their already frenetic roll outs of fiber -- particularly in highly competitive markets,” Piper wrote in a research note.

Verizon has opened a FiOS store in New York City to tout its fiber TV and Internet service. Time Warner Cable is going after the same customers with a marketing campaign to remind people that New York is Time Warner territory. (The ad battle between the two in New York has already gotten pretty ugly, and even landed the companies in court).

But can advertising campaigns -- even mean ones -- beat a service offered in Wal-Mart, America’s favorite store? It’s too early to tell. May the best telco win.


-- Alana Semuels