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AT&T U-verse IPTV as the Low-Price Leader

CNET reports that AT&T finally made its U-verse IPTV service commercially available to 5,000 homes in San Antonio, following many months of numerous delays.

Until this week, AT&T's TV service was available to only a handful of consumers in that city, the first of many on the list of U-verse prospects. AT&T expects to offer the service to a total of 15 to 20 markets by the end of the year. The company has said it plans to spend $4.6 billion through 2008 to bring television and high-speed Internet services to almost 19 million homes.

Initially AT&T's service will be very similar to what is already offered by cable companies. The starting price for packages is $69 a month and goes up to $124, depending on Internet speeds and whether the customer opts for premium-channel packages. Industry pundits and Time Warner Cable (the incumbent MSO) are already predicting that the lower-price differential wont be enough to attract many consumers away form their current pay-TV service provider.

Regardless, AT&T has entered the market by offering three months of free U-Verse service to customers as part of its promotional push. It's also marking down its installation fee to $20 from $95. AT&T's successful strategy as the low-price leader of DSL broadband access has clearly influenced its decision to attract the less demanding and more price sensitive pay-TV consumer with appealing introductory offers.

But AT&T claims that it offers customers more for their money, including fast channel changing, video-on-demand, three set-top boxes, a digital video recorder, a picture-in-picture feature that allows viewers to surf channels without switching channels and an interactive program guide.

However, features such as DVR service for the entire home and high-definition TV programming won't be available until October. Therefore, current subscribers to these features on either the incumbent cable or satellite providers will have to relinquish these capabilities if they choose to switch to AT&T.

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