AT&T plans Netflix rival and expands LTE to 380m people

22 July 2016 | Alan Burkitt-Gray


AT&T’s video customers are falling but company plans to launch DirectTV Now mobile streaming service this year

AT&T is to launch a video mobile streaming service to compete with Netflix and other rivals later in 2016. At the same time it has announced that its 4G LTE service covers 380 million people, including 65 million in Mexico.

The launch of the streaming service follows AT&T’s acquisition of satellite-delivered TV service DirecTV in 2015 for around $67 billion. The new streaming service will be called DirecTV Now, CFO John Stephens said when giving AT&T’s latest quarterly earnings.

“We expect the millions of people who don’t now subscribe to a video service and prefer a streaming option will be impressed,” Stephens said in an earnings call about the results.

AT&T has 49,000 fewer video subscribers than it did at this time last year. It added 342,000 customers for DirecTV, but lost 391,000 users of its fibre-to-the-home service, U-verse.

The company’s launch of DirecTV Now is seen as a way to reverse the long-term decline in video customers, but will also put more pressure on its 4G network.

AT&T has invested in the two Mexican mobile networks, Iusacell and Nextel Mexico, that it bought for more than $4 billion in late 2014 and early 2015. It expects to increase its 4G coverage in the country from 65 million to 100 million by the end of 2018.

The Mexican networks are still heavily loss-making, though. Revenues in the second quarter were $606 million, on which it made a loss of $225 million. The company has 10 million mobile subscribers in Mexico, implying a loss of $22.50 per customer in the second quarter alone.