AT&T reaches 2.5 million U-verse IPTV connections

DALLAS, Texas — AT&T Inc. (NYSE:T) today reported solid second-quarter results highlighted by double-digit earnings growth, an increase in consolidated revenues and improved margins. These results were driven by continued growth in mobile broadband, including a record quarter for iPhone activations, gains in IP-based and strategic business services and disciplined execution on cost initiatives.

Gains in AT&T U-verse TV, with Growth in Integrated Broadband and Voice Services

AT&T U-verse TV subscribers increased by 209,000 in the quarter to reach 2.5 million, up almost 60 percent over the past year. In the second quarter, the AT&T U-verse High Speed Internet attach rate continued to run above 90 percent, and about two-thirds of subscribers took AT&T U-verse Voice. More than three-fourths of AT&T U-verse TV subscribers have a triple- or quad-play option from AT&T. ARPU for U-verse triple play customers was nearly $160, up 13.8 percent year over year and 6.8 percent from the first quarter of 2010.

AT&T’s U-verse deployment now reaches 25 million living units. Companywide penetration of eligible living units is more than 13 percent, and across areas marketed to for 30 months or more, overall penetration is more than 22 percent. AT&T’s total video subscribers, which combine the company’s U-verse and bundled satellite customers, reached 4.6 million at the end of the quarter, representing 17.9 percent of households served.

U-verse Revenues Exceed $1 Billion for the Quarter

Increased AT&T U-verse penetration drove 32.0 percent year-over-year growth in consumer IP revenues (broadband, U-verse TV and U-verse Voice). U-verse continues to drive a transformation in AT&T’s consumer business, reflected by the fact that consumer IP revenues now represent 40.4 percent of AT&T’s consumer wireline revenues, up from 30.6 percent in the year-earlier quarter. In the second quarter, AT&T U-verse revenues exceeded $1 billion for the first time, more than twice the U-verse revenues in the second quarter of 2009.

Video Connections (000)*:

                                9/30/08  12/31/08   3/31/09   6/30/09   9/30/09  12/31/09   3/31/10   6/30/10
                               --------  --------  --------  --------  --------  --------  --------  --------
Satellite Connections             2,183     2,190     2,205     2,210     2,195     2,174     2,127     2,053
U-verse Video Connections           781     1,045     1,329     1,577     1,816     2,064     2,295     2,504

* Video connections include sales under agency agreements with EchoStar and DirecTV customers and U-verse connections

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