THEY WENT THERE: AT&T phasing out U-Verse TV

If there were any questions about whether the future belonged to DIRECTV’s technology or U-Verse’s, they’ve been pretty much put to bed. Several sources including Bloomberg report that AT&T has stopped all manufacturing orders for new U-Verse hardware. That means that they continue to expect net customer losses, and that new customers will receive refurbished equipment, a common industry practice.

This news ends over a decade of development of AT&T’s terrestrial fiber-based TV service, once seen as revolutionary. It also silences critics who believed that the high quality content and hardware provided by DIRECTV would be shelved in favor of AT&T-centric analogues. After all, it was AT&T top dog Randall Stephenson who originally developed U-Verse TV and there was some concern that he was too attached to it to let it go.

Don’t think AT&T is getting out of the terrestrial TV game, however. There have been rumors and outright statements saying that future terrestrial customers will get equipment based more on DIRECTV’s SWM technology than on the existing fiber technology, and that makes a lot of sense. Customers don’t often care about the back end, the stuff attached to the side of the house; it makes sense from a cost point of view as well as a quality point of view to create equipment that doesn’t care if the signal came from the sky or from underground. Developments in the last several years have made it easier to convert from fiber to DIRECTV’s proprietary coax transmission model; one expects that costs for this sort of converter, while currently high, will drop once there are millions of installations.

Current U-Verse customers won’t be affected at this stage of the game, but eventually one city at a time will be converted to the new system. New equipment will be required and in the meantime you can expect AT&T reps to actively work with customers to decide if it’s better to wait for the transition or to change over to satellite technology instead. Of course, many people got into U-Verse TV because of the bundling opportunities with internet and home phone, opportunities that DIRECTV may not have had at the time. Now that it’s easier than ever to get DIRECTV service bundled with wireless, home phone, and internet at great rates, it may be time for some of those U-Verse TV customers to make the switch.

Personally, I’m not surprised at all at this turn of events; DIRECTV has always had the superior technology and while “Average Joe customer” may not have missed much from having U-Verse TV, better technology always wins in the end as implementation costs become an option.