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AT&T Warns Investors of Heavy Q3 DirecTV Subscriber Losses

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Thursday, 12 Oct 2017 11:17 AM

AT&T will report heavy subscriber losses at DirecTV in its third-quarter earnings later this month, bleeding that the telco giant chalked up to heightened competition in the pay-TV arena and the wallop of the summer hurricane season.

In a Securities and Exchange Commission filing late Wednesday, AT&T said it would post a net loss of 90,000 traditional video subscribers for the quarter, offset by the addition of nearly 300,000 subscribers to its DirecTV Now streaming service. AT&T reports its third-quarter earnings on Oct. 24.

As MoffettNathanson analyst Craig Moffett observed, the net loss means DirecTV is losing about 390,000 traditional subscribers -- customers that had been paying at a higher rate than the low-cost DirecTV Now service. Moffett chalked it up to consumers moving away from the traditional big pay-TV bundle.

"It should be clear that DirecTV, like all of its cable peers, is suffering from the ravages of cord-cutting," Moffett wrote.

The analyst also noted that the steep decline in traditional subs means that it is "all but unthinkable" that AT&T will make an effort to acquire DirecTV's satellite TV rival Dish Network. "It is becoming increasingly clear that the wheels are falling off satellite TV," he wrote.

AT&T warned that the drop in traditional video subs will hurt its revenues and margins. Adjusted consolidated operating income for its entertainment group will be flat year-over-year.

© 2017 Thomson/Reuters. All rights reserved.

 
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AT&T will report heavy subscriber losses at DirecTV in its third-quarter earnings later this month, bleeding that the telco giant chalked up to heightened competition in the pay-TV arena and the wallop of the summer hurricane season.
at&t, investors, directv, subscriber, losses
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2017-17-12
Thursday, 12 Oct 2017 11:17 AM
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