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AT&T U-verse Likely to Boost Wireline Revenue in 2Q15


Jul. 24 2015, Updated 8:06 a.m. ET

AT&T U-verse to support growth of Consumer Markets segment in 2Q15

In the last part of this series, we learned that a key growth driver of AT&T’s wireline division is expected to support the year-over-year, or YoY, revenue growth of the Consumer Markets segment in 2Q15. AT&T U-Verse is a fiber-based voice, Internet, and video service. It’s similar to Verizon’s (VZ) FiOS.

FiOS and AT&T U-Verse may be compared to certain offerings from cable companies such as Time Warner Cable (TWC), Comcast (CMCSA), and Cablevision (CVC). AT&T U-Verse has been supporting the growth of the Consumer Markets segment, and we expect this trend to continue in 2Q15.

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Performance of AT&T U-verse in 1Q15

AT&T U-Verse is a fast-growing part of the telecom company’s wireline segment. The AT&T U-Verse service is available for both consumers and businesses. But consumers contribute most to AT&T U-Verse revenues.

As you can see in the above chart, adjusted AT&T U-Verse revenue has increased significantly in the last two years. In 1Q15, this revenue stream grew by ~20.3% YoY, thanks mainly to customer additions. AT&T added 50,000 U-verse video subscribers and 400,000 U-verse broadband subscribers during the quarter. In the Consumer Markets segment, adjusted AT&T U-verse revenue increased by ~19% YoY to ~$3.9 billion in 1Q15.

You may consider diversified exposure to AT&T by investing in the iShares Core S&P 500 ETF (IVV). IVV had ~1% exposure to the company as of June 30, 2015. Alternatively, you could get exposure with the iShares Russell 1000 Value ETF (IWD). IWD had ~1.8% exposure to AT&T at the end of June.


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