Enlarge / A person walks with an umbrella exterior of AT&T company headquarters on March 13, 2020, in Dallas, Texas.

AT&T misplaced 617,000 clients from DirecTV and its different TV companies within the remaining quarter of 2020, capping a 12 months through which it misplaced practically 3 million clients within the class, AT&T reported at present.

AT&T at present additionally knowledgeable the Securities and Exchange Commission that it has taken “noncash impairment charges of $15.5 billion” associated to its ongoing DirecTV debacle. AT&T mentioned the $15.5 billion expenses replicate “changes in our management strategy and our evaluation of the domestic video business… including our decision to operate our video business separately from our broadband and legacy telephony operations.” This operational resolution “required us to identify a separate Video reporting unit and to assess both the recoverability of its long-lived assets and any assigned goodwill for impairment,” AT&T mentioned.

AT&T mentioned it additionally logged “charges of approximately $780 million from the impairment of production and other content inventory at WarnerMedia, with $520 million resulting from the continued shutdown of theaters during the pandemic and the hybrid distribution model for our 2021 film slate.”

The expenses had been added to AT&T’s This autumn bills. As a end result, AT&T reported a $13.9 billion internet loss within the quarter, in comparison with a internet revenue of $2.4 billion a 12 months in the past. This autumn income was $45.7 billion, down from $46.8 billion 12 months over 12 months. The This autumn internet loss swung AT&T to a full-year internet lack of $5.4 billion.

“Executives called the non-cash accounting charge a sign of the pay-TV unit’s aging status as the Dallas company promotes an Internet-streaming model that gives its content-production business a direct line to viewers,” The Wall Street Journal wrote at present.

“Our biggest and single most important bet is HBO Max,” AT&T CEO John Stankey mentioned.

Premium TV clients flee in droves

AT&T is all the way down to 16.5 million clients within the Premium TV class that features DirecTV satellite tv for pc, U-verse wireline video, and the newer AT&T TV on-line service. That’s down from 17.1 million three months earlier and down from 19.5 million because the starting of 2020.

AT&T has strung collectively a number of years of huge TV-customer losses since early 2017, when it had over 25 million customers within the class. The lack of practically 3 million clients in 2020 was an enchancment over 2019, when AT&T misplaced 3.4 million Premium TV clients within the calendar 12 months.

These numbers don’t embody the streaming service previously often called DirecTV Now, which AT&T simply killed off this month. The service dropped from 1.86 million subscribers in Q3 2018 to 656,000 by year-end 2020. Existing clients can maintain that service, however AT&T is not providing it to new customers.

DirecTV and U-verse clients have been pushed away by years of value will increase and AT&T’s decreased use of promotional presents. This is mirrored in AT&T’s common income per person (ARPU) within the Premium TV class, which jumped from $121.76 monthly at year-end 2018 to $131 at year-end 2019 and $137.64 on the finish of 2020.

AT&T attributed the 617,000-customer loss in This autumn to “competition, lower gross adds from the continued focus on adding higher value customers and a programming dispute, partially offset by lower churn.”

Video income down 11.2 p.c

AT&T reported video income of $7.2 billion in This autumn 2020, “down 11.2 percent year over year due to declines in premium and [online] subscribers, partially offset by higher premium TV ARPU and higher advertising revenues during the general election.” Operating bills within the class had been $7.1 billion, leaving AT&T with a revenue of $98 million.

AT&T does not report particular person numbers for DirecTV, U-verse TV, and AT&T TV. But the corporate mentioned positive factors in AT&T TV streaming subscribers final quarter helped offset losses in DirecTV and U-verse, that means that DirecTV and U-verse collectively misplaced greater than the 617,000 net-customer loss within the Premium TV class.

AT&T mentioned it’s inspired by the progress of HBO Max, which prices $15 a month by itself however can also be included in varied bundles. “The release of Wonder Woman 1984 helped drive our domestic HBO Max and HBO subscribers to more than 41 million, a full two years faster than our initial forecast,” Stankey mentioned.

Selling DirecTV at a loss

AT&T purchased DirecTV for $49 billion in 2015 however has been making an attempt to promote the beleaguered satellite tv for pc division for the previous few months. AT&T is reportedly near a deal to promote a stake in DirecTV to TPG, a private-equity agency, however AT&T might preserve majority possession of the corporate. Bids for DirecTV have reportedly valued the subsidiary at about $15 billion.

Fiber positive factors, DSL losses

AT&T’s broadband-subscriber base remained regular at 14.1 million within the quarter. The firm boosted fiber-to-the-premises subscribers from 4.68 million to 4.95 million in This autumn 2020, however it dropped from 8.98 million to eight.74 million in fiber-to-the-node and from 440,000 to 407,000 in its outdated DSL service. AT&T stopped accepting new DSL clients in October 2020.

AT&T mentioned its This autumn broadband income was “$3.1 billion, down 1.4 percent year over year due to declines in legacy services partially offset by higher IP broadband ARPU resulting from an increase in high-speed fiber customers and pricing actions.” Operating bills had been $2.8 billion.

Source arstechnica.com