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AT&T U-verse Pay-TV is a Work in Progress

According to the Yankee Group, while IPTV is the next wave of technology that will revolutionize the way we watch television. Unfortunately, IPTV is still years away because of the intensive rollout strategy that AT&T must implement to lay Fiber To The Node (FTTN) architecture to support the full spectrum of services.

Although trials are in place, it will take a few years for the company to reach its target of servicing 19 million households. With this lengthy time frame, cable operators have the opportunity to improve their services and strategies in order to fend off the impending competitive threat.

To fully develop strategies to keep the threats of AT&T and other telecom companies at bay, it is critical for cable operators to understand what IPTV is and how it compares with existing television offerings. There are many misconceptions about IPTV -- as opposed to broadband 'over the top' TV -- and how the user experience will be different for consumers.

As the U-verse launch in San Antonio has already proven, in the beginning the IPTV viewing experience won't be much different than existing Pay-TV offerings. However, as time progresses and more applications develop, IPTV's integrated platform will (or should) make the evolution process for advanced video services much quicker and simpler than what cable MSOs will need to do -- as far as network upgrades and service integration are concerned.

Yankee Group believes that although there are no guarantees, the key to AT&T's success will be effectively marketing -- but not overhyping -- IPTV, QoS, content partnerships, and seamless integration within the product bundle and within the digital home. In the end, the customer will be the winner as IPTV providers and cable operators battle for market share and improve applications and services to win subscribers and reduce churn.

More important to American consumers, the additional competition should help to drive down the cost of expensive U.S. pay-TV services that are currently priced at between two- to six-times the cost of equivalent services within the leading Asia-Pacific and European pay-TV markets.

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