DIRECTV NOW passes 200k; AT&T linear down 27k; DTVLA down 21k video subs in 4Q 2016

DALLAS — AT&T Inc. (NYSE:T) today reported 2.8 million North American wireless net adds, strong DIRECTV NOW growth and solid adjusted operating margin and earnings gains, with continued free cash flow growth for the fourth quarter.

Entertainment Group

The company added 235,000 satellite subscribers in the fourth quarter. IPTV subscribers declined by 262,000 as the company continued to focus on profitability and emphasized satellite sales. For the third straight quarter, gross additions increased on a year-over-year basis even when excluding IPTV customers transitioning to DIRECTV.

During the quarter, the company introduced DIRECTV NOW and added more than 200,000 subscribers. Special promotions and launch pricing helped drive this strong growth. Also, there is not enough historical data at this time for the company to provide insights on expected churn.

The Entertainment Group ended the quarter with 25.5 million total video subscribers when including DIRECTV NOW subscribers and 25.3 million linear video subscribers.

Video (in thousands)

              3/31/15   6/30/15   9/30/15  12/31/15   3/31/16   6/30/16   9/30/16  12/31/16
             --------  --------  --------  --------  --------  --------  --------  --------
Connections
 U-verse        5,969     5,946     5,854     5,614     5,232     4,841     4,515     4,253 
 DIRECTV            -         -    19,570    19,784    20,112    20,454    20,777    21,012 
Total           5,969     5,946    25,424    25,398    25,344    25,295    25,292    25,265

Additions
 U-verse           49      (23)      (92)     (240)     (382)     (391)     (326)     (262)
 DIRECTV            -         -        26       214       328       342       323       235
Total              49      (23)      (66)      (26)      (54)      (49)       (3)      (27)

International – DIRECTV Latin America

Fourth-quarter subscriber net losses were 21,000, driven by declines in Brazil that were partially offset by gains in Chile, Colombia, Uruguay and Ecuador. Total subscribers at the end of the quarter were 12.5 million. Sky Mexico had approximately 7.9 million subscribers as of Sept. 30, 2016.

Video (in thousands)

                   9/30/15  12/31/15   3/31/16   6/30/16   9/30/16  12/31/16
                  --------  --------  --------  --------  --------  --------
Connections                        
 Brazil              5,538     5,444     5,342     5,348     5,337     5,249 
 Other Countries     7,006     7,066     7,094     7,175     7,139     7,206
Total               12,544    12,510    12,436    12,523    12,476    12,455
                      
Additions                        
 Brazil              (129)      (94)     (101)         6      (12)      (88)
 Other Countries        16        60        28        81      (36)        67
Total                (113)      (34)      (73)        87      (48)      (21)