AT&T Phasing Out U-Verse as It Pushes Users Toward DirecTV

AT&T is phasing out the U-verse TV service as it pushes new customers to newly acquired DirecTV, a sign the company is giving up on once-heralded plans to compete head-on with cable television through telephone lines. AT&T has stopped building U-verse set-top boxes and is nudging prospective customers toward its satellite unit, which has lower hardware and programming costs.

The shift is the first stage of a plan to create a “home gateway” within three years that will consolidate all AT&T services and act as a central hub to deliver video to any device. The de-emphasis of U-verse underscores AT&T’s promise to squeeze $2.5 billion in annual cost savings from its purchase of DirecTV. Current U-verse subscribers will be able to retain the service, and AT&T is even offering new promotions to those who keep it. But new customers are being directed by its marketing department to choose the satellite package.