AT&T Unveils Internet TV Service

AT&T unveils an internet TV service, modeled closely on cable. AT&T TV includes a two-year contract and prices that double after the first year.
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AT&T  (T) - Get Report shares rose after the telecom and media giant unveiled its new online TV service: AT&T TV.

The service resembles cable TV in many ways. It includes a set-top box and a two-year contract, with prices that almost double in the second year.

The basic package has 155 channels, including local broadcast channels, ESPN, AMC, HGTV, FX and USA. It starts at $49.99 a month and then jumps to $93 in the contract’s second year. The highest-level plan has 255 channels. It costs $69.99 for the first year and then surges to $135.

The service includes an activation fee and an early-termination fee of $15 a month. 

Analysts say the new AT&T platform is more expensive than many other internet TV packages and that the company is looking to boost profits with the service.

AT&T is still feeling the after-effects of its 2015 purchase of DirecTV. The satellite-TV service is bleeding subscribers - more than 2.5 million last year, according to The Wall Street Journal - and its costs are high. It said it spent about $800 per customer that it gained last year.

The new service gives AT&T some advantages. Because it goes over the internet, AT&T doesn’t have to worry about new wiring, wall-mounted boxes and expensive at-home service from technicians.

The platform includes an Android  (GOOGL) - Get Report TV set-top box and a remote control similar to the ones used for cable TV. The remotes have a Google Assistant button.

At last check, AT&T shares traded at $36, up 2.2%, while the S&P 500 index was 0.9% higher above 2976.