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AT&T loses another 600,000 TV customers as it seeks buyer for DirecTV

Enlarge / AT&T’s logo and share price displayed on a monitor at the New York Stock Exchange on Tuesday, Jan. 22, 2019.

AT&T lost 627,000 TV customers in Q3 2020, an improvement over previous quarters as the company continues its attempt to sell its failing DirecTV division.

In earnings results reported today, AT&T said it lost 590,000 “Premium TV” customers, a category that includes DirecTV satellite, U-verse wireline TV, and the online service known as AT&T TV. AT&T also lost 37,000 customers from AT&T TV Now, the streaming service formerly known as DirecTV Now.

The Premium TV loss of 590,000 customers in Q3 is the best result since AT&T lost 544,000 subscribers in Q1 2019. AT&T’s Premium TV losses ranged from 778,000 to 1.16 million customers per quarter from Q2 2019 through Q2 2020. AT&T currently has 17.1 million Premium TV customers, down from over 25 million in early 2017.

“The decline is a significant improvement over prior-year trends,” AT&T CFO John Stephens said in a call with investors today.

The AT&T TV Now streaming-service loss of 37,000 customers was also an improvement, but AT&T is running out of customers to lose in that segment. The service has 683,000 subscribers left from the 1.86 million it had two years ago.

DirecTV still needs a buyer

AT&T’s massive TV losses spurred its ongoing attempt to sell DirecTV, which it purchased for $49 billion in 2015. First-round bids for DirecTV reportedly valued the satellite TV unit at around $15.75 billion. There haven’t been any major updates since the New York Post reported two weeks ago that AT&T “invited a handful of suitors into the second round of an auction of the struggling satellite-TV broadcaster.”

The AT&T TV streaming service—which mimics cable TV with hidden fees, contracts, and big second-year price hikes—is apparently doing better than DirecTV. AT&T doesn’t report customer losses for each service in the Premium TV category, but it said that gains in AT&T TV “helped offset” the customer losses in DirecTV and U-verse.

AT&T attributed the 590,000-customer net loss to “lower churn and [a] higher quality base,” meaning that fewer people dropped service and the customers who stayed are paying more than those who left. In the last quarter, the average revenue per user for AT&T Premium TV went up from $124.98 to $130.55 per month.

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