AT&T Stops Making U-verse TV Boxes: Report

AT&T has stopped making set-tops for its U-verse TV service as the telco focuses video efforts on the lower-cost DirecTV platform and looks to head down a technology path that could eventually phase out its current IPTV platform, Bloomberg reported Tuesday.

Bloomberg noted that AT&T, which closed its acquisition of DirecTV last July, is working on a  centralized home gateway platform that, within the next three years, will consolidate all of the company’s services, but stressed that AT&T isn’t shutting down U-verse and is letting currently U-verse TV subs stay on the platform. But new customers are being steered to the DirecTV platform.

Update: AT&T said U-verse isn’t being phased out, and provided this statement: "To realize the many benefits of our DirecTV acquisition, we are leading our video marketing approach with DirecTV. However, our first priority is to listen to our customers and meet their needs, and if we determine a customer will be better served with the U-verse product, we offer attractive and compelling options." 

Of late, AT&T has been placing a bigger emphasis on the lower-cost DirecTV platform.

AT&T added 214,000 U.S. satellite TV subs but shed 240,000 U-verse TV subs in Q4 2015 as the company “focused on profitability and increasingly emphasized satellite sales.” At the time, AT&T chairman and CEO  Randall Stephenson said he expected  U-verse TV churn to improve as the company shores up its newly combined sales channels.

Arris is among the vendors that have been feeling the brunt of shifting video strategies at some of its largest telco customers, including AT&T and Verizon Communications. Arris, which recently expanded its global set-top market share lead after acquiring Pace plc, is scheduled to report Q4 2015 results on Wednesday (February 17). Cisco Systems, another maker of U-verse TV receivers, recently sold its CPE division to Technicolor.

AT&T has been dropping hints about its video future. Last fall, AT&T announced it had picked Ericsson to “enhance” its TV platform and evolve its satellite and wireline TV platform. AT&T’s current U-verse TV service runs on Mediaroom, the IPTV middleware platform that Ericsson acquired from Microsoft in 2013. Prior to that, AT&Tannounced (subscription required)that it would use a derivative of DirecTV’s gateway-client architecture to establish a more uniform, cloud-based video platform for the combined company.

Last fall, AT&T hired Enrique Rodriguez, a former Cisco Systems and Microsoft exec, as executive vice president and chief technical officer, where he’s now overseeing both U-verse and DirecTV and heading up the technical integration of those services.