The second-largest U.S. mobile service provider
) has inked a deal with
) to add several Viacom channels to its U-verse TV online
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With the AT&T U-verse ID, AT&T customers will now get to
view the full-length episodes from BET, Comedy Central, MTV,
Nickelodeon, Spike and VH1 on demand through Viacom's network-based
websites like www.mtv.tve. Also, customers will soon get the access
to these services on their mobile devices including smartphones and
This is the first "TV Everywhere" offering from AT&T and
Viacom. AT&T's U-verse service offerings are a huge success and
gaining strong momentum in the market. Healthy growth from its
U-verse video (U-verse TV and bundled satellite) services is
helping AT&T to counter increasing competition in the business
from its major rivals -
Verizon Communications Inc.
Sprint Nextel Corp.
). The U-verse services coupled with support from business revenue,
in particular strategic services, are driving the growth in the
Revenue from residential customers edged up 1.7% year over year
(maximum growth in more than four years) to $5.5 billion in the
second quarter, driven by AT&T U-verse services. AT&T's
total video subscribers, which include U-verse TV and bundled
satellite customers, touched 5.8 million at the end of the second
quarter. Total U-verse TV subscribers reached 4.1 million with the
net addition of 155,000 customers on continued high-speed Internet
attach rates. Strategic business services such as Ethernet, Virtual
Private Networks, hosting, IP conferencing and application
services, spiked 13.5% year over year.
We believe the expansion of U-verse services will continue to boost
data revenue and ARPU (average monthly revenue per user) in the
We are maintaining our long-term Neutral recommendation on
AT&T. The company retains the Zacks # 3 (Hold) Rank for the
short term (1-3 months).