Faced with broadband penetration maturity, increasing mobile substitution, and competition from cable on the small and medium businesses front, AT&T has an opportunity to increase its customer value proposition by offering an enhanced IPTV service, called U-verse TV, which leverages customers' next-generation IP network while allowing them to bundle it with their other services such as broadband access, home phone, and wireless services.
AT&T has introduced several enhancements for its U-verse TV customers at no extra cost. Many of the new features and content are enabled through strategic partnerships and alliances, including:
• Total Home DVR, which gives you the freedom to watch and manage recordings from a single DVR on any connected TV in the house.
• U-verse TV Multiview, a new app that lets you watch up to four channels at once on your TV screen.
• Regular Additions to U-verse High Definition (HD) Channel Lineup, which now offers access to about 110 HD channels, which is typically more than the local cable providers.
• AT&T U-bar, which gives you personalized, on-screen weather, sports, traffic, and stock information.
• Media Share, which lets you stream your personal photos and music files located on your home computers to any connected TV in the home.
• Weather On Demand, an app that gives you instant access to check the current weather conditions and detailed forecasts in any U.S. city.
• Yahoo! Sports Fantasy Football, an app to help you manage your fantasy teams from your U-verse TV screen through the AT&T U-bar.
• College Basketball from Yahoo! Sports, which gives basketball fans the ability to view tournament brackets, their personalized completed bracket, game summaries and box scores, and more through the AT&T U-bar during the basketball season.
• Online Photos from Flickr, an app that lets you view on your TV personal photos that you have uploaded to flickr.com.
• TV Awards and New Shows, a new app that helps you stay on top of this season's award shows and season premieres.
• Remote Mobile Access, which allows AT&T U-verse TV and Internet customers to use any compatible AT&T wireless phone or handset to search U-verse TV program listings, schedule program or series recordings, and manage or delete stored DVR content.
• Faster Internet Surfing Speeds, with the launch of Max (12 Mbps) and Max Plus (18 Mbps).
AT&T also expanded its U-verse offers with the introduction of AT&T U-verse Voice. U-verse Voice is a managed IP-based digital voice service that is delivered over the AT&T's fiber network.
• Push adoption of triple-play or quad-play services through bundling services.
– "U-verse is beginning to reshape our consumer revenue profile," says Richard G. Lindner, chief financial officer and senior executive vice president. AT&T is leveraging the successful U-verse offering to help push other services through bundling.
• Increase customer loyalty. U-verse customers are found to be very loyal. With such loyalty, AT&T is hoping to:
– Drive up revenue per household. (AT&T posted its seventh consecutive quarter of year-over-year growth in consumer revenues per household, up 2.5 percent.)
– Use U-verse to help retain wireless and wireline customers. (In the third quarter, AT&T had a 27.5 percent smaller decline in consumer connections than the third quarter a year ago. AT&T credits this smaller decline to the U-verse offering, but this could also be credited to a better economic outlook than a year ago.)
AT&T expects 2009 U-verse revenues to top US$2 billion, with more growth ahead. The pricing strategy for U-verse offering is very much tied to other services.
• The goal is to increase U-verse TV subscribers by 240,000, bringing the total to 1.8 million, up more than 1 million over the past year. Across all eligible living units, U-verse TV penetration is just above 12 percent.
• According to a survey just published by the analyst firm Strategy Analytics, over 80 percent of Verizon FiOS and AT&T U-Verse television customers reported to be "very" or "extremely" satisfied with their provider. Cable customers, on the other hand, had the lowest satisfaction levels.
• More than three-quarters of U-verse customers were triple or quad play, combining TV, broadband, voice, and wireless.
• A year ago, consumer wireline IP revenues made up 23.2 percent of consumer wireline total. In the third quarter, these products represented nearly a third of consumer wireline revenues.
• Price packages vary by region.
AT&T U-verse services are enabled by a 100 percent IP-based platform delivered over AT&T's fiber-rich network, which brings optical connections deeper into residential neighborhoods. This strategy allows AT&T to deploy advanced IP-based television and Internet services using only a fraction of the capital required by other providers.