AT&T is nearly finished with its intentional TV customer cleanup.
The company confirmed as much during its third quarter earnings call.
AT&T undertook the customer clean up as a means to reduce costs, increase profits.
The 2019 AT&T TV customer cleanup
The phasing used here might not have been the best, but AT&T has made it clear it no longer wants to service low-quality subscribers.
The company has typically defined this subset of subscribers as those locked to promotional or heavily discounted plans. Essentially, customers who the company deems as “low-value” customers based on how much they’re paying.
The customer cleanup affects both DIRECTV and AT&T TV video services, including AT&T TV NOW. The cleanup started when the NOW service was still operating at DIRECTV NOW although it has continued throughout the AT&T TV NOW era so far.
Now, AT&T foresees its active attempt to clear out low-value customers as coming to an end.
It is not entirely finished just yet as the company still expects “a little bit more of a customer cleanup that will run into Q4.” Otherwise, the unsaid message was that by the end of the year the efforts to rid itself of these costly customers will be over.
The end of falling subscribers?
Throughout 2019, AT&T has lost a number of video subscribers. This customer decline has affected AT&T TV NOW, DIRECTV and U-verse.
According to AT&T, this is the cleanup in action. Therefore, AT&T not only views the declines as expected, but actually part of its grand plan.
In other words, AT&T is now saying that it believes the subscriber drops are about to come to an end. Yes, it expects another drop in the fourth quarter, but that’s about it.
Whether that is true or not will become clear as the market moves into 2020. What is clear, is whether by design or not, AT&T has lost a lot of live TV customers in the past year.
At the start of the fourth quarter of 2018, AT&T TV NOW (DIRECTV NOW at the time) had more than 1.8 million subscribers.
Since then, each quarter has seen fresh subscriber declines. The company announced its third quarter results today with the last quarter following the same trend. AT&T TV NOW lost 195,000 subscribers. Across all its major live TV services, AT&T lost over one million subscribers during the quarter.
Following today’s earnings release, AT&T confirmed its AT&T TV NOW subscriber count now stands at 1.1 million.
With the service now hovering around the one million marker, it stands to reason the subscriber declines will start to slow down.
The question for next quarter is by how much?