AT&T’s “Project Velocity IP” network upgrade plan is likely to...
AT&T’s “Project Velocity IP” network upgrade plan is likely to create some headline risk for the cable and satellite industry, Wells Fargo analyst Marci Ryvicker said Thursday in an email note to investors. AT&T announced Wednesday it plans to spend…
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$14 billion to expand its wireline and wireless broadband networks (CD Nov 8 p11). “We would characterize T’s initiatives as mostly headline risk for several reasons,” Ryvicker said in the note. “i) cable HSD products would still be faster than the “new” U-Verse (and significantly faster than U-Verse IPDSLAM and 4G LTE), ii) the network build would take A LOT of time, iii) AT&T will likely have to pass on costs to consumers through higher rates (which could turn out to be a positive for the space as a whole), and iv) the IPDSLAM is only an augmentation of the current data network -- there is no additional video product.” On the cable side, Charter Communications and Time Warner Cable will see the most incremental competition as a result of AT&T’s plan, Ryvicker said. Comcast will see slightly less competition, while Cablevision will experience “virtually no impact,” she said. On the satellite side, the deal will be a net positive for DTV because of its partnership with AT&T, while Dish “may see incremental competition via DishNet,” Ryvicker said.