Skeptics Tune in to AT&T’s IPTV Plans

Can AT&T, now with a single pilot program, expand its IPTV ambitions to up to 20 U.S. markets by the end of the year?

The goal follows last week’s announcement AT&T plans to spend $4.6 billion delivering IP-based television to 19 million homes by the end of 2008.

Scheduled to begin next month with the evolution of AT&T’s first IPTV pilot program in San Antonio, the telecom will also launch IPTV service in Houston later this year, according to AT&T spokespeople.

Video is telecom’s answer to cable’s triple play offering of voice, video and cable Internet access.

By 2009, there could be 53 million worldwide IPTV users supporting an equipment market worth $38 billion, according to Infonetics Research.

However, analysts question AT&T’s proposal, pointing to lack of detail and expansion plans that could enter uncharted waters for IP-based television services.

While AT&T refuses to name the 15-20 markets, the company plans to serve all four regions stretching from the West Coast to the East Coast.

AT&T’s San Antonio service, begun as a pilot program in January, “is available in several neighborhoods and we have several hundred customers,” said Michael Coe, an AT&T spokesman.

San Antonio’s switch from pilot program to commercial rollout is seen as a sign AT&T’s fiber-to-node and copper-to-the-home mix has
matured.

AT&T refused to provide details of the expansion plans, citing “competitive reasons.”

However, the U-verse TV service will offer more than 200 channels, video-on-demand, and an internal DVR, Brad Mays, an AT&T spokesman, told internetnews.com.

“Nobody’s been allowed to see what’s gone down,” said Patti Reali of Gartner.

Reali said lack of independent numbers or the ability to question real customers makes her question the viability of such a rapid expansion.

According to Mays, as the expansion ramps up, AT&T will offer picture-in-picture, a larger video-on-demand library and faster channel changing than other digital broadcast services.

But in order for AT&T to compete “you can’t go in with less than full guns,” Reali said.

HDTV channels, already offered by cable, satellite and Verizon will be included during the scale-up phase, Mays said.

Additionally, AT&T’s goal of 19 million homes by 2008 would be a record for delivering IP-based television. In North America, Manitoba Telecom holds the record with 50,000 subscribers to its VDSL-based IPTV service, according to Michelle Abraham, an analyst with In-Stat.

Worldwide, Hong Kong’s PCCW Ltd has the largest deployment with 100,000 subscribers, according to Gartner’s Reali.

AT&T’s competitor, Verizon, dismissed talk of expansion. “IPTV hasn’t been proven on a large scale,” said Verizon spokesman Bob Elek.

Unlike AT&T, which uses fiber-to-the-node and then copper to the home, Verizon employs an all-fiber solution called FIOS. Verizon has deployed FIOS in 50 communities across seven states, according to Elek.

The number two telephone company today introduced its FIOS TV service in
Tampa, Fla., offering the 40,000 residents a $39.95 package, including 180 channels with video on demand and high-definition TV.

In January, Verizon began offering fiber-optic video in Howard County, Maryland. Other states with a Verizon video presence include California, Massachusetts, New York and Texas.

Verizon has a 15-year plan to offer video that aims to sign up
more than one million homes and offices in nine states by the end of the year.