In today's competitive markets for home entertainment and communications services, companies have to offer the latest and greatest services -- rabbit ears and the local news just won't cut it anymore. Having conquered all your telephony needs, AT&T (NYSE: T) is now moving from your ears to your eyes, thanks to its new U-verse Internet and television services. Last week, the company announced that 100,000 people have now signed up for the service, with new features added.
For the 99.97% of the population that doesn't yet subscribe to U-verse, here are the basics: U-verse offers both television and Internet services, delivered to homes over a new fiber-optic network. The TV packages include a variety of paid and free programming, while the Internet service comes in different speed grades for fast browsing and downloads. AT&T is also upgrading the television offering with customized Web content like sports and weather, as well as new high-definition versions of channels such as Animal Planet and the Golf Channel.
AT&T is not alone in blazing the next-generation TV trail, though. Arguably, it isn't even the first. Verizon Communications (NYSE: VZ) has been busy digging trenches and laying its own glass fibers to outfit customers with similar services. Verizon's network, however, runs fiber optic cables all the way to customer premises, while AT&T typically stops at a local node that services multiple homes. This typically leaves around 3,000 feet of copper wire to handle the last leg of the service delivery.
While we could argue plenty about the technical differences in the networks, and debate which offering is superior, it's more important for investors to know that these initiatives are vital to both companies' future profitability. The billions each is pouring into the new networks are already paying off, keeping subscribers from wandering into the open arms of competition.
Cable companies such as Comcast (Nasdaq: CMCSA) and Time Warner Cable (NYSE: TWC) are quickly moving into the telcos' territory by offering digital video and phone services over their wires. In addition, alternative communications providers such as Clearwire (Nasdaq: CLWR), Vonage (NYSE: VG), and even eBay's (Nasdaq: EBAY) Skype are stripping customers away with low-cost calling plans. If it's going to thrive from here on out, AT&T needs to successfully offer differentiated services. Investors should tune in and watch carefully for future growth in U-verse subscriptions.
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An engineer at heart, Fool contributor Dave Mock developed many elaborate tinfoil and rabbit-ear structures -- but they never worked. He owns no shares of companies mentioned here. Dave is the author of
The Qualcomm Equation. eBay is a Stock Advisor selection. The Fool's disclosure policy entertains and enlightens at the same time.
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