U-verse rollout to slow, cost more with Southeast expansion

AT&T has lowered its expectations slightly for the deployment of its U-Verse IPTV service through 2008.

The company now expects its fiber-to-the-node (FTTN) network to reach 17 million homes by the end of next year, rather than its previous goal of 18 million (which in turn was a downward revision from 19 million made earlier this year).

The change, revealed in a regulatory filing today, is the result of AT&T’s planned efforts to deploy FTTN in the former BellSouth territory, which requires initial investments to be made before deployment there can accelerate.

“Since these start-up activities are in preparation for, but do not immediately result in, passing living units, there is a corresponding change in living units we expect to pass by the end of 2008,” AT&T said in the filing.

The company expects to spend between $4.5 billion and $5 billion deploying U-Verse over the course of this year and next year, an upward revision of half a billion dollars. Some of that money will be shifted to the initial investments required for a Southeast deployment.

Last month AT&T announced acceleration of its U-Verse rollout, with the pace “approaching” its year-end goal of 10,000 installations per week. The company reported 126,000 U-verse video subscribers at the end of the third quarter, a 147% increase from the second quarter. The service was then available in 33 markets.

After it acquired BellSouth last year, AT&T declined to say whether it would extend its FTTN network to BellSouth’s footprint. Analysts predicted AT&T would expand FTTN to the Southeast despite the fact that BellSouth had an existing fiber-to-the-curb network there that reached about 1 million homes.

In August AT&T pledged to spend $250 million “over the next several years” bringing U-Verse to South Carolina, a former BellSouth state, but added that the projection did not represent an increase in the carrier’s overall spending plans.