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AT&T Shifts TV and Internet Businesses to Advance Billing

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Jan. 1 2019, Updated 7:31 a.m. ET

Aligning service billing system

AT&T (T) is shifting to advance billing for its television and broadband services. As a result, the company is ending the practice of offering customers prorated credits when they cancel a service before a billing period runs its full course.

The shift to advance billing means AT&T will charge customers the full cost even if they cancel a service just a day into a new billing period. The changes are scheduled to go into effect on January 14, 2019. According to AT&T, it is making these changes so its video and broadband services follow the same billing policies of its mobility services.

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AT&T caught up in a shrinking television market

AT&T is shifting to advance billing in its television business at a time when it has been bleeding pay-TV customers. Its satellite-based television business, DIRECTV, lost 346,000 customers in the third quarter, which followed losses of 286,000 customers in the second quarter and 188,000 pay-TV customers in the first quarter. Consumers’ shift to online video services has been shrinking the traditional television market. Dish Network (DISH), Comcast (CMCSA), Charter Communications (CHTR), and Altice USA (ATUS) shed 341,000, 106,000, 54,000, and 28,100 pay-TV subscribers, respectively, in the third quarter.

Entertainment revenue declined nearly 6.0%

In the third quarter, revenue was down 5.6% YoY to $11.8 billion in AT&T’s entertainment group, which houses the DIRECTV business. The group accounted for 25% of AT&T’s company-wide revenue, which increased 15.3% YoY to $45.7 billion in the third quarter.

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