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AT&T Sets Device Freebie Bait After U-verse Rate Hikes

AT&T is trying to reel in U-verse subs -- offering new broadband bundle customers a choice of a free Xbox, Kindle Fire HD or Nexus 7 tablet, or Sonos music system -- after implementing price hikes for TV and Internet services across the board last month.

The 2013 price increases, which took effect with Jan. 27 billing statements, include a $1.99 surcharge for local broadcast TV channels “to recover a portion of the amount local broadcasters charge AT&T to carry their channels,” according to the telco. TV plans increased by $2 per month and broadband tiers increased $3 monthly.

The free-device offer -- valued at up to $350, according to AT&T -- is set to run through July 27, 2013. New AT&T customers can sign up for special discounted pricing for 12 months.

The device promo is available only for new AT&T Internet customers who take a one-year contract on a qualifying bundle. Customers are notified of their eligibility for the promos within four weeks of service activation, and the Xbox, Kindle Fire, Nexus 7 or Sonos system will be shipped two to three weeks after redemption to customers who retain service for at least 30 days, according to AT&T.

In the fourth quarter of 2012, AT&T gained a net 609,000 U-verse High Speed Internet subscribers to reach a total of 7.7 million -- while also losing 611,000 DSL lines in the period. The operator added 192,000 U-verse TV subs to stand at 4.54 million IPTV subscribers as of the end of 2012.

In Q4, about 90% of new U-verse TV customers also signed up for U-verse High Speed Internet. About 70% of TV subs take three or four services from AT&T, and 55% of U-verse broadband subscribers have a plan delivering speeds up to 12 Mbps or higher, according to the telco.

Also Monday, AT&T launched two U-verse TV apps: U-verse Jukebox, which lets users play songs from their mobile devices on TV; and the Interactive Workout App, which can create a customized workout. The apps are available to U-verse TV customers who also have U-verse broadband for no extra charge.