AT&T is moving to phase out its U-verse TV service and is instead pushing customers toward its DirecTV brand, Bloomberg reported Tuesday.
Though it is still offering new promotions to existing U-verse customers, Bloomberg said the company has ceased production of its U-verse set-top boxes and is referring new customers to its DirecTV customer service for satellite service packages.
According to Bloomberg, the shift comes after AT&T was hit with its worst-ever quarterly loss of U-verse subscribers and looks to deliver $2.5 billion in annual cost savings it promised with its acquisition of DirecTV.
In the fourth quarter, AT&T missed expectations by $650 million with consolidated revenues of $42.1 billion. The company reported 14,000 satellite net additions and 192,000 IP broadband net additions, but lost 26,000 total video subscribers.
AT&T CEO Randall Stephenson in the past has repeatedly pointed to the integration of the company’s wireless and video assets as the future of the company.
“It’s still early but we see a lot more opportunity to use video to drive sales and lower churn for all of our services,” Stephenson said during January’s fourth quarter earnings report.
But while it’s clear that AT&T’s vision includes DirecTV going forward, it’s less apparent how long U-verse will remain part of the picture.
Late last year, the Wall Street Journal reported AT&T had laid out plans to merge its U-verse and DirecTV brands under a single platform by 2017 or 2018.
An AT&T spokesman told Bloomberg on Tuesday the company is leading its video marketing approach with DirecTV, but will listen to customer feedback to determine whether or not U-verse is the best option to meet their needs.