Although cable companies are rolling out DOCSIS 3.0, and peer company Verizon is rolling out FiOS, AT&T is comfortable with the speeds on U-verse, said John Stankey, President and CEO AT&T Operations, at a Sept. 9 Bank of America Merrill Lynch conference in Marina del Rey, Calif.

While defending U-verse’s data service, Stankey said the company is starting to offer U-verse data as a standalone product and will offer a U-verse DSL/wireless bundle in the future.

“U-verse data is a very competitive data service,” Stankey said. “Our belief is that what matters is the overall value of the product. It is not the intent to compete solely on speed. We are not in a position to do that. We’ll compete on the effectiveness of bundle and mobility of the bundle.”

Stankey said that AT&T’s research has found that 80% of its cable converts view U-verse data speeds superior to cable, even if cable was actually faster in many cases.  AT&T plans to play up features, functionality, overall value, support and service integration, he said. “There is lots of work to do to shift the debate from speed.”

AT&T did not offer standalone U-verse data service out the gate because of issues surrounding CPE costs and operational processes, he said. Now, he said “we have since increased [our CPE] options. We have standalone data modems and a stripped down gateway. We have done the work for self install data only, [with the] maturing of the CPE inventory and the maturing of our processes. We now have the right CPE and the right processes and we are in fact selling standalone data at higher speeds.” He added that AT&T plans to bundle that service (the current top end service is 18 Mbps) with wireless in a data bundle.

Stankey also said AT&T is comfortable that its current and future technology can handle consumer bandwidth needs and stay ahead of peak demand loads. In addition to VDSL pair bonding, AT&T has at its disposal spectrum management, vectoring, reducing overhead in the VDSL control plane and improved video compression, he said. “There is no new physics,” he said. “We think we’ve got adequate amount of access bandwidth to deal with [bandwidth needs] over time.”

“We are actively switching video streams today. Customers will do more over the top. They will need more switching. It’s better to have a switched than a broadcast infrastructure.”

Stankey added AT&T has studied current users extensively. When data usage peaks, TV usage is at its lowest, he said, for instance. When multiple TV sets are on, there is a high percentage that are tuned to the same channel, requiring less streams to the home.

In six months, the amount of content U-verse subscribers have recorded has grown from 18 hours to 22 hours. That means more content that is being watched is recorded content, which does not require a stream to the home.

If more bandwidth is needed, pair bonding, which is being tested in Dallas, is available. “We are deploying in customer homes and taking the necessary measurements,” he said, such as interference and lifts in bandwidth. “We do have to manage some of the spectral issues, but the best news is when you do an infrastructure upgrade you have the advantage of eliminating other forms of transmission. "

"We like the speed lifts we’re seeing, and we like what we’re seeing on the second and third generation chipsets.” That said, Stankey allowed that of the 30 million homes passed U-verse is targeting, perhaps 10% of that base “we won’t effectively serve in the long haul.”

On U-verse TV, Stankey said: “We’re seeing strong performance on all our metrics.” That includes:

• 18% improvement in hours to install
• Installs within 3 days of order
• 31% fewer in home repair visits
• 15% improvement in repair hours
• Scheduling same day repairs
 
Stankey said churn is running better than plan (which had been industry norms). "We feel really good where we are,” he said.
 
The company plans to rollout a third HD stream in a few test markets in Q4, he said, with a broader deployment scheduled for 2010. AT&T also has started to rollout a mosaic TV application, entitled Multiview, in a number of markets.