DIRECTV up 328k; U-Verse down 382k; DTVLA down 73k subscribers in 1Q 2016

DALLAS — AT&T Inc. (NYSE:T) today reported strong revenue, adjusted operating margin, adjusted EPS and free cash flow growth for the first quarter.

Entertainment Group

Total video subscribers were down 54,000 in the quarter. The company added 328,000 satellite subscribers in the first quarter. U-verse TV subscribers declined 382,000 as the company continued to focus on profitability and increasingly emphasized satellite sales. The Entertainment Group ended the quarter with 25.3 million video subscribers.

Innovation

In recent news, the company:

• Announced that later this year the company plans to give customers the ability to access and stream DIRECTV video services over a wired or wireless Internet connection from any provider and from virtually any device – smartphone, tablet, Smart TV, streaming media hardware or PC. The company plans to introduce three new video offers designed for customers looking for premium content with choice and flexibility in what they want to watch and how they want to watch it. Customers can expect to see these new streaming options beginning in the fourth quarter of 2016.
• Launched a new channel dedicated entirely to 4K programming featuring the first live 4K UHD broadcast channel in the United States at the Masters Golf Tournament.
• Announced that Fullscreen, part of the company’s Otter Media joint venture with The Chernin Group, is launching a subscription video on demand (SVOD) service programmed for the social-first generation. Available for $4.99 per month, Fullscreen SVOD features 800 hours of original and acquired content, including exclusive programming from top creators and social influencers. As premier launch sponsor, AT&T will provide special offers of this service to its customers and will co-produce premium millennial-focused content. Otter Media already has two of the leading SVOD services. Introduced more choices and more data for AT&T U-verse Internet customers, including an unlimited data option available to any U-verse Internet customer.

Video (in thousands)

              3/31/14   6/30/14   9/30/14  12/31/14   3/31/15   6/30/15   9/30/15  12/31/15   3/31/16
             --------  --------  --------  --------  --------  --------  --------  --------  --------
Connections
 U-verse        5,661     5,851     6,067     5,943     5,993     5,971     5,880     5,640     5,232
 DIRECTV            -         -         -         -         -         -    19,570    19,784    20,112
Total           5,661     5,851     6,067     5,943     5,993     5,971    25,450    25,424    25,344

Additions
 U-verse          201       190       216      -124        50       -22      (91)     (240)     (382)
 DIRECTV            -         -         -         -         -         -        26       214       328
Total             201       190       215        73        50      (22)      (65)      (26)      (54)

International

DIRECTV Latin America

AT&T is a leading provider of pay television services in Latin America and owns 100% of its satellite operations serving Argentina, Chile, Colombia, Ecuador, Peru, Uruguay, Venezuela and parts of the Caribbean. It also owns approximately 93% of Sky Brasil and 41% of Sky Mexico. Sky Mexico financial results are accounted for as an equity method investment and are included in consolidated results.

First-quarter subscriber net losses were 73,000, driven by declines in Brazil. Total subscribers at the end of the quarter were 12.4 million. Sky Mexico had approximately 7.3 million subscribers as of December 31, 2015.

Video (in thousands)

                  9/30/15  12/31/15   3/31/16
                 --------  --------  --------
Connections                        
 Brazil             5,538     5,444     5,342
 Other Countries    7,006     7,066     7,094
Total              12,544    12,510    12,436
                        
Additions                        
 Brazil             (129)      (94)     (101)
 Other Countries       16        60        28
Total               (113)      (34)      (73)