at&t will stop offering DirecTV services to its customers toward the end of the first quarter. The not-unexpected move came as at&t found itself reselling both DirecTV and Dish Network services as a result of its acquisition of BellSouth, which had been a DirecTV partner. In its own territory, at&t has been partnering with Dish Network.
The Dish Network contract itself expires at the end of 2008, but at&t's longer business relationship with EchoStar, which offers the Dish Network service, probably is decisive.
DirecTV has to have anticipated the decision and has to be expected to roll out new channel and direct sales efforts early next year, to compensate for the loss of sales momentum from at&t.
It will have a lot of work to do. By some estimates, at&t accounted for an estimated 15.2 percent of DirecTV's gross additions but 58 percent of net subscriber growth. And though DirecTV probably will end 2007 with strong subscriber growth at the same level it saw in 2006, 2008 obviously will be more challenging.
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