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AT&T on Friday said it would market and sell DirecTV's satellite television service, ending its partnership with DirecTV-rival Dish Network in offering customers TV as part of a bundle of wireless, home phone and broadband services.
AT&T planned to start offering DirecTV service after its contract with Dish expires Jan. 31, 2009. The telecommunications company said existing AT&T-Dish customers would see no change in service.
Telephone companies typically offer customers discounts for subscribing to service bundles. Rival Cable operators compete with packages that include TV, Internet telephony, and broadband services.
"Our focus is on providing customers with a better TV experience than cable," Jeff Weber, VP for video and entertainment for AT&T, said in a statement announcing the new partnership.
The DirecTV offering complements AT&T's own U-verse digital TV service, which isn't available in all regions of the country. U-verse, launched in 2006, struggled initially, but appears to be doing much better. The number of subscribers has been growing with AT&T reporting in July a net subscriber gain of 170,000 in the second quarter for a total of 549,000.
AT&T expects to be able to offer the Internet-based service to 31 million residential customers in the next few years. In the meantime, the company needs a partner to offer television service nationwide.
Dish in the summer reported in a Securities and Exchange Commission filing that its partnership with AT&T would conclude at the end of the year. Analysts at the time believed AT&T was angling for better terms from Dish to renew the partnership, or was trying to spark a bidding war between Dish and DirecTV.
Dish has been a partner with AT&T since 2003. At times, AT&T has also partnered with DirecTV. The telephone company has about 2.23 million satellite-TV subscribers through DirecTV and Dish.