AT&T Still Has One Million 'Low-Quality' Video Subscribers To Get Rid Of

Advertisement
Advertisement

AT&T still has around one million 'low-quality' video customers it intends to part ways with.

This is based on the latest shareholders update provided today at the Oppenheimer Conference by the company's Chief Financial Officer, John Stephens.

What AT&T is specifically referencing here is those customers that are locked into cheaper plans by AT&T's design. Over the past few months AT&T has been more vocal than usual on the value it places on customers with the company already having explained how it intends to "clean up" its subscriber base in a similar way to how it is currently cleaning up third-party video content in general.

Advertisement

As part of today's update, AT&T reiterated this point by stating "the company expects to maintain its focus on improving the quality of its video subscriber base" and this will partly be achieved through a "disciplined approach" to promotional pricing and incentives going forward.

These latest comments further add to the narrative that AT&T is not particularly concerned about how many subscribers it continues to lose in the meantime.

Last month AT&T provided its latest quarterly results where among things confirmed its "premium TV subscribers" had dropped by 778,000. This was in addition to the decline of 168,000 subscribers felt by its DIRECTV NOW service during the same period. Today, AT&T explained that of those losses, 600,000 were customers on "two-year price locks' – the ones it is actively cleaning up. Adding to this, AT&T said "leaving about 1 million subscribers on those pricing plans."

Advertisement

AT&T reiterated that it will continue to focus "on attracting higher-value subscribers" moving forward.

AT&T distinguishes between low and high-value customers primarily based on the APRU associated with each customer, however, in today's announcement it also pointed to the customer's internet speeds as another usable customer evaluation metric. For example, AT&T confirmed that during the second quarter it has focused its efforts on "attracting subscribers in areas in which it offers internet speeds of 50 Mbps or higher." Leading to the suggesting it is less interested in serving customers who might be on slower internet speeds, including its own existing customers on lower speeds.

Internet speeds and reliability are important factors when it comes to streaming quality and it would seem that one of the ways the company intends to offset against problems that may arise in the future from less reliable connections is to ensure the majority of its video customers were on a higher speed internet plan to begin with.

Advertisement

With the combination of focusing on higher-value customers, including those on higher-served internet speeds, as well as the two major carriage disputes it is currently engaged in, AT&T expects an "elevated" level of video customer churn to continue "for the remainder of 2019."

As part of the same update announcement, AT&T also reiterated that it plans to initially launch its AT&T TV (not to be confused with AT&T TV NOW) before the end of the third quarter in "select markets" before further rolling out the service nationwide in "early 2020."

This is in addition to preparing to launch its HBO Max service next spring which will offer consumers "approximately 10,000 hours of premium content." AT&T also once again confirmed that more information on the new HBO Max service will be provided during the company's upcoming WarnerMedia Day, scheduled for October 29, 2019.

Advertisement