AdAge says that AT&T is phasing out U-verse in favor of DirecTV to save money and boost profitability. But U-verse TV was broken from the start, and DirecTV gives AT&T time to fix it.
AdAge reports that AT&T is phasing out U-verse TV and focusing on DirecTV. AT&T has stopped making U-verse set-top boxes and is directing new customers to signup for DirecTV.
Two reasons are cited for the switch. Firstly, U-verse TV is not competing very well with services like Comcast’s X1. U-verse TV lost 240,000 subscribers in Q4 2015 while Comcast gained 89,000 subscribers. Secondly, DirecTV is more profitable because it has negotiated more favorable content licensing terms than AT&T has been able to.
However, the real reason could be more fundamental than this. U-verse TV is based on twisted-pair copper wire which barely delivers enough bandwidth to handle 2 simultaneous HD TV channels. It certainly can’t handle more advanced technology like Ultra HD. Simply put, there is no future for U-verse TV on twisted pair copper wire.
Moving TV to DirecTV liberates bandwidth on the wires which can be applied to broadband. This will help AT&T compete with cable more effectively in the short term.
That said, the future belongs to photons on fiber, not electrons on wires. AT&T will need to replace copy wires with fiber connections if it is to effectively compete with cable companies.
Chapter 1: AT&T phasing out U-verse TV (0:25)
Chapter 2: Why the move? (1:00)
Chapter 3: U-verse TV is broken (2:10)
Chapter 4: How FiOS got it right (4:05)
Chapter 5: AT&T must modernize DirecTV (5:00)
Chapter 6: AT&T must deploy fiber (6:15)