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from: Broadband Reports

AT&T Cuts U-Verse Deployment Goal in Half

March 1, 2007

A day after AT&T told the San Antonio Express News they were “taking off the brakes” on U-Verse IPTV & VDSL deployment, USAToday says that the company quietly cut their projected deployment goals in half for 2007. Fletcher Cook, an AT&T spokesman, tells USA Today the company decided there was no need to issue a press release to highlight the change. “We figure people are paying attention to the analysts’ call,”

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from: USA Today

AT&T slows 'Lightspeed' release goals

By Leslie Cauley, USA TODAY Thu Mar 1, 7:29 AM ET

New year, new target.

AT&T (T) won't reach 18 million homes this year with its "Lightspeed" broadband network, after all. Instead, it will reach less than half the original target: 8 million.

AT&T unveiled its latest 2007 target in an unusually quiet manner: It was offered up to Wall Street analysts on an earnings call on Jan. 25. The 8 million figure later showed up in a few investor notes, where it did not attract much attention.

Fletcher Cook, an AT&T spokesman, says the company decided there was no need to issue a press release to highlight the change.

"We figure people are paying attention to the analysts' call," he says.

Adds Cook: "We feel that we have been very upfront with our targets and goals" with respect to Lightspeed.

Jan Dawson, a telecommunications analyst at Ovum, says he isn't surprised by AT&T's under-the-radar approach.

"When things are upbeat (with Lightspeed), they broadcast it," he says. "When they have to make downward revisions, they try to bury it."

AT&T's advanced broadband services - voice, high-speed data and video - are sold under the "U-verse" brand name.

The service is currently available in 13 markets in five states.

Lightspeed was announced at a splashy press conference in late 2004. At the time, AT&T said it expected to spend $4 billion to $6 billion to make a menu of broadband services available to 18 million homes by the end of 2007.

AT&T started making some revisions to its targets in 2005. One called for Lightspeed to reach 18 million homes by 2008, giving itself a one-year extension on that total.

In a recent 10-K filing, AT&T again revised its plan, raising the 2008 goal to 19 million households. In that filing, AT&T says nothing about the original 2007 targets.

The San Antonio-based communications giant has also updated its cost estimate. AT&T now says its spending on Lightspeed from 2006 through 2008 will add up to $4.6 billion. The total expenditure from 2004 through 2008: $5.1 billion.

In the two-plus years since Lightspeed was announced, AT&T has been wrestling with a thicket of problems related to the network's complex Internet Protocol TV (IPTV) system. Microsoft is developing the IPTV software and also is acting as the lead integrator on the project.

Cook says Microsoft's IPTV software isn't to blame: "We're building a brand new service from scratch, and we want to make sure we do it right the first time."

John Hodulik, a UBS telecom analyst, says AT&T is finally becoming more "realistic" about its broadband targets. As a result, he says, "I'm less worried (about Lightspeed) today than I have been in the past." He adds: "I'm very optimistic."

Hodulik says AT&T is currently adding about 100 U-verse customers a day. In March, he expects that figure to ramp up to about 300 a day.