January 6, 2005 1:27 PM PST

SBC goes public with 'U-verse' TV plan

LAS VEGAS--SBC Communications on Thursday formally named its Internet-based TV service "U-verse," preparing for its ambitious challenge against the cable industry later this year.

In a keynote address at the Consumer Electronics Show in Las Vegas, SBC Chief Executive Edward Whitacre Jr. said U-verse will offer hundreds of television channels, high-speed Internet access and voice calls piped into the home through a phone line. SBC will begin selling U-verse in areas served by its fiber-optic network by the end of 2005, but he did not specify where.


SBC chief Edward
Whitacre Jr.

"It's easy for our imagination to outpace our ability to deliver," Whitacre said in his keynote. "But in 2005, SBC will deliver. 2005 will be a transformational year for convergence for consumers."

Whitacre said homes served by U-Verse will get data speeds of 20 megabits per second to 25mbps, delivering high-definition TV, faster broadband and other Internet-based services. He said customers will be able to watch TV shows through their handhelds, cell phones and PCs by hooking into U-verse's home network. He added that customers will be able to program U-verse's digital video recorder using their cell phones.

Whitacre did not give pricing for U-verse.

U-verse is the result of SBC's $4 billion initiative to upgrade its network with speedier fiber-optic lines that can pipe video into homes. The company plans to build out its upgrade to reach 18 million homes within three years, and it has hired companies such as Microsoft and Alcatel to help make U-Verse a reality.

SBC's expensive push into pay TV highlights the competitive pressures regional phone companies are facing from their cable rivals. Cable companies such as Comcast, Time Warner Cable and Cox Communications have taken a significant lead in offering broadband Internet access to their TV customers. Many cable companies have packaged voice calling into their plans, creating a "triple play" of services that have caused customer erosion among the Bells.

The Bells have responded by investing heavily in upgrading their systems to create their own triple-play packages. Verizon is in the process of running fiber-optic lines directly into millions of homes to offer faster Internet access, hundreds of TV channels and calling plans.

SBC and BellSouth are not running fiber into homes, but instead are running lines to neighborhood "nodes" and then delivering their services through common copper wires.

The Bells hope their investments will pay off by limiting cable's continued encroachment into their core voice markets. Cable companies such as Time Warner Cable provide voice offerings via Internet phone calling, which costs less for the provider and the consumer.

 

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