Tuesday, January 08, 2008

AT&T's tepid investment in residential market comes home to roost

AT&T is experiencing declining revenues in its residential wireline market segment, the telco's chairman and CEO Randall Stephenson told Citi's Entertainment, Media and Telecom Conference. Wall Street responded by pushing down AT&T's share price 4.7 percent to $39.10 in afternoon trading.

The Associated Press quotes Stephenson as blaming softness in the residential wireline segment on disconnections by consumers struggling to pay household bills.

However, what's likely the real reason is AT&T's own flawed residential strategy. AT&T has stubbornly resisted investing in upgrades to its aging and increasingly obsolete last mile copper-based distribution system. Consequently, the telco is unable to offer high speed Internet services and bundles of voice and broadband within large portions of its 22-state service area to the residential and growing home office-based market segment.

Moreover, AT&T's Project U-Verse rollout offering "triple play" bundles including television service based on a hybrid of fiber optic and copper cable has run into a variety of technological and market-based obstacles, causing the company to consistently miss projections for new U-Verse customers.

No comments:

Web Analytics