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DirecTV video customer additions fail to offset U-verse losses in three months to end-March.
AT&T on Wednesday published financial results for the first quarter of this year that showed a positive impact from its US$48.5 billion acquisition of DirecTV. However, the U.S. telco saw customers decline in key segments, including in DirecTV’s core market – video services.
The operator posted consolidated revenues of US$40.54 billion (€36 billion) for the three months to the end of March, up 24% on the year-ago quarter, "largely due to the 24 July 2015 acquisition of DirecTV," it said in a statement.
Operating costs rose by just under 24% to $33.4 billion, operating income climbed to $7.1 billion from $5.6 billion, and net profit grew to $3.8 billion from $3.26 billion.
"Our consolidated revenues, adjusted earnings and free cash flow continue to grow as margins continue to expand," said AT&T chief executive Randall Stephenson. "And we’re putting up these numbers even as we invest in building our Mexico wireless business."
He added that "DirecTV merger synergies are on track to reach $1.5 billion or better by the end of the year."
But while DirecTV has had a beneficial impact on AT&T’s headline financial figures over the past few quarters, adding the satellite TV specialist into its portfolio has not driven customer growth.
AT&T lost a net 54,000 video customers in the quarter, with satellite customer growth failing to offset the decline in its U-verse base. It had 25.34 million video customers at the end of March, a massive increase on its 5.97 million a year earlier, prior to the addition of DirecTV, but fewer than its end-Q3 and year-end totals.
Its broadband connections ticked up slightly to 14.29 million, while fixed voice connections fell by 385,000 over the three months to 12.11 million.
On the closely-watched mobile side, AT&T increased its overall base to 130.45 million, including reseller customers and connected devices, as well as pre and postpaid phone users. Connected devices accounted for a hefty 1.55 million of its 1.78 million quarterly net adds.
The telco lost 363,000 branded postpaid phone customers during the quarter, although the figure was offset by half a million branded prepaid net adds.
