AT&T lost 90,000 video subscribers in total over the course of the third quarter of the year despite the fact that its DIRECTV NOW service added close to 300,000 new customers during the three-month period ending September 30th, the company revealed in a Wednesday filing with the United States Securities and Exchange Commission (SEC). Given its streaming additions, the firm’s statement indicates that it lost over 390,000 U-Verse and satellite subscribers which are generally considered to be worth more as they spend more. The Dallas, Texas-based wireless carrier explained the performance slump with an increasingly competitive pay TV market and over-the-top solutions, as well as recent natural disasters which hit parts of the U.S. in the form of hurricanes. The company’s decision to make its credit standards stricter is another move that contributed to the losses, AT&T said, implying that this particular factor was expected by the firm. The latest turn of events still prompted the telecom giant to adjust its operating income margin for the third quarter of 2017 and project it expects a stagnation in this segment compared to the same period last year.
Some analysts are unsurprised by AT&T’s filing, noting how the cord-cutting trend is heavily eating into the industry’s profits so even if a scenario in which underperforming players start undercutting one another is disregarded, the popularity of internet television is by itself enough of a basis for a weak pay TV quarter to be expected. For the time being, AT&T is continuing its efforts to promote DIRECTV NOW and is presently offering free month-long trials of the service, though it remains to be seen how will the company approach its issues in the pay TV sector. More details on the matter may be revealed on October 24th when the second largest mobile service provider in the country is scheduled to publicize its consolidated financial report for the third quarter of the year.
AT&T is also presently waiting for an approval of its proposed acquisition of Time Warner whose federal review was said to be in its final stages in mid-August but has yet to be officially concluded. Should the deal go through, it would likely serve as a prelude to a wave of major consolidations in the industry, starting with the widely reported merger of T-Mobile and Sprint.