U-verse selling AT&T bundled services

Implications: The original launch of U-verse had two key objectives: 1) Bundling IPTV with other services to create FMC in the home; 2) Expanding company-owned AT&T wireless stores to sell bundled services.  The sales of only 100,000 U-verse subscribers have resulted in a limited product offering.

Analysis: The U-verse product was launched by AT&T with the goals of driving bundled services in the home and transforming AT&T wireless stores into selling convergence.  The FTTN technology with DSL instead of FTTH was believed to be sufficient for the purpose of bundling services. The Unity Plans of telephone usage could be bundled with Internet access and IPTV.  The Unity Plans would become triple packs or even quad packs with mobile plans.  And the strategy included transforming some the 1,800 company-owned wireless stores into retail centers for complete fixed-mobile convergence (FMC) in the home.  The sites would become AT&T Experience Stores for demonstrating and selling multimedia.  The AT&T Experience Stores have been dramatically remodeled, but the U-verse sales of only 100,000 subscribers shows the insignificant results.  AT&T’s new chairman emphasizing mobility might indicate that U-verse will be a limited product offering compared to the focus on wireless ARPU and churn.