Speaking at Citigroup’s Global Entertainment, Media and Telecommunications Conference in Phoenix, Stephenson said he believed the real threat to the traditional access-line business was not from increased competition from cable operators rolling out their digital-voice offerings, but the emergence of wireless as customers’ primary phones.
AT&T is seeing some impact on the consumer business from the economic downturn, but Stephenson noted that wireless has been the last to go. The larger impact has been in traditional access and broadband.
Because of customer’s increased reliance on wireless for their voice option, he said, AT&T will take advantage of its ability to bundle it with broadband and video products, whether AT&T’s U-Verse TV Internet-protocol-TV service or satellite TV.
U-verse is competing against cable offerings of bundled services with its own packages of voice video and broadband that will also include voice-over-IP services later this year. The rollout of the video service will cost AT&T $4.5 billion-$5 billion in 2007 and 2008 and is expected to pass 18 million homes by the end of the year. At the end of the third quarter U-verse had 126,000 subscribers.