AT&T (T) is trying to roll out its internet TV platform. Verizon (VZ) has already made a commitment of $18 billion for fiber-to-the-home to compete with cable companies like Cablevision (CVC) and Comcast (CMCSA) by offering voice, broadband, and TV.
AT&T is behind in putting in fiber, but it hopes to offer the TV service to 19 million homes by the end of the 2008. That is, of course, if the Microsoft IPTV software system it has built for AT&T and others will stop breaking.
The Wall Street Journal has commented before that glitches in the software have caused problems for other telecommunications companies in Europe, but the need for AT&T and Verizon to hit the market with television offerings is acute. Cable has a multi-year head start on offering VoIP. Wall St. analysts point to cable’s ability to offer voice, broadband, and VOD has the primary reason that their revenue bases are growing so fast.
As AT&T loses land line customers to cable providers and independent VoIP firm like Vonage (VG), it can hardly afford the Microsoft software problems. If they continue into the next quarter or two, it is really bad news.
Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.
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