AT&T: 40,000 U-verse installs per week by 2008’s end

John Stankey

In AT&T’s analyst day yesterday, John Stankey, the company’s group president of telecom operations, provided some up-to-date data on AT&T’s consumer offerings as well as some aggressive goals for next year, including the quadrupling of its weekly installation rate for U-verse triple-play services.

On installations: We’re dramatically ramping our U-verse operations. We’ll exceed our stated goal of having 10,000 installs per week by the end of this year. Our installs per week will continue to ramp next year to over 40,000 per week by the end of 2008. This pace will put us at over 1 million subscribers by the end of 2008. Of the 17 million living units we will pass by the end of next year, over 70% of those will be marketable, providing enough sales opportunity to reach our goals. Although we’re not ultimately where we want to be, we’ve seen great improvements in key operations. Experienced technicians are averaging over an hour less to complete installation, so this bodes well for our continuing trend of improvement. As we ramp, we’re hiring a significant number of new technicians, but we can move them to a very productive level in a short time. We’re projecting our current [installation] costs of $550 per subscriber will decrease into the range of $400 per subscriber by 2010.

On broadband growth: Though the rate of market expansion is slowing, we see broadband as a growth driver. We expect broadband revenues to grow at a low double-digit [compound annual growth rate] over the next three years, including DSL and U-verse. The U-verse broadband attach rate has been over 90%. Forty percent of our customers are new broadband users to AT&T. As we win with U-verse, we win the home. Within three months, we have about 5% penetration of eligible living units, climbing to more than 11% after just a year. We’re taking broadband technology share, going from 42% share in Q306 to 46% share in Q307. Cable has fallen from 50% to 47%.

On trouble tickets: The rate at which customers are calling us for troubles is now half what it was earlier in the year, illustrating the effectiveness of the IPTV platform.

On movers: Sixteen percent of our base moves each year. I’d expect something similar for other companies. We've dedicated internal resources specifically to the mover segment so we can better identify and serve them. Within the footprint of the new AT&T, we have processes in place to capture moves across our territories so we smooth the process for someone moving from Florida to Texas, as an example. We’re positioning the AT&T brand as a full-service provider, including video, so we capture a higher share of the first call for services when a customer decides to move. We believe movers over-index to wireless and broadband, so our product focus takes that into account, with products like DSL Direct, where a customer can purchase broadband with either wired or wireless for same great price.

On retail distribution: Distribution is becoming an increasingly critical in winning the battle for consumer. Our 1200 company-owned retail locations are a great asset that cable can’t match. We’re expanding the products that can be showcased and sold in those stores, such as DSL and video. Eighty-six percent of our sales occur in call centers, but this will drop to 73% in 2010 as other channels continue to grow in importance. We also have an aggressive plan to more than double online sales.