AT&T Inc. launched a new online TV product in 10 cities Monday — a package of channels and fees that look a lot like conventional offerings, including the company’s own DirecTV.
The new AT&T TV offering debuted in three Texas markets — Corpus Christi, El Paso and Odessa — as well as in Orange and Riverside, California; West Palm Beach, Florida; Topeka and Wichita, Kansas; and St. Louis and Springfield, Missouri.
The service is a pilot of what AT&T calls its future “workhorse” TV platform, designed to eventually replace traditional services such as DirecTV and U-verse TV. AT&T plans to have the service available nationwide by the end of the year.
Using a set-top box, AT&T is delivering live TV and access to apps like Netflix over the internet, similar to its rebranded DirecTV Now and rival streaming services like Sling TV from Dish Network Corp.
In a throwback to traditional pay-TV practices, the service requires a two-year contract, with packages starting at $59.99 a month for about 70 channels. After the first year, the price bumps up to $93 a month. Qualified customers can bundle AT&T internet service and TV starting at $89.99 a month for the first year of the contract.
“Not much of a difference,” said Walt Piecyk, an independent telecom analyst. AT&T isn’t going to undercut rivals’ prices, but that fits with its strategy. The company’s priority is reducing debt, and it’s been willing to lose customers if they’re unprofitable.
“It shouldn’t be a surprise to investors that AT&T is not going to be the price leader in the market,” he said.
Additional TV boxes cost $10 a month, and no more than three streams can be viewed at the same time. Activation is $19.95, regional sports network aren’t included and not all local broadcast networks are available. The price does include 500 hours of DVR recording. The price tiers are similar to DirecTV offers.
AT&T says it will waive a $30-a-month unlimited data fee for subscribers who bundle the TV service with AT&T broadband. Like Comcast Corp. and some other broadband providers, AT&T caps data use. AT&T customers on lower-tier plans are limited to 1 terabyte of data a month. The penalty for exceeding that cap is $10 for every additional 50 gigabytes.
“This is a pilot program,” said Chip Wilson, an AT&T spokesman. “We’ll gather input from customers and figure out what works or what doesn’t.”