AT&T: U-verse Now $6 Billion Annual Business

As Wall Street focused on AT&T's iPhone numbers in the first quarter of 2011 after losing device exclusivity, the telco reported continued growth in U-verse -- adding 218,000 TV subscribers in the period -- even as legacy DSL and phone line connections continued to slide.

AT&T had 3.2 million U-verse TV subscribers at the end of March. That's just behind Cablevision Systems, which with the addition of Bresnan Communications, counted 3.31 million basic video subs at the end of 2010. U-verse video, voice and data services in the first three months of 2011 generated about $1.5 billion in revenue, representing about $6 billion on an annualized basis, AT&T said. That's up more than 50% from the first quarter of 2010, but U-verse still represents only about 10% of AT&T's total wireline segment, which tallied revenue of $14.95 billion in the quarter (down 3.2% from the first quarter of 2010). Moreover, AT&T's residential phone lines fell to 23.48 million at the end of March, a year-over-year decline of 11.8%. While the telco posted a net gain of 175,000 wireline broadband connections that was down 31% from the year-ago period "and leaves legacy DSL in almost certain decline," Sanford Bernstein senior analyst Craig Moffett wrote in a research note.