AT&T's U-Verse plagued with problems

According to a report in The Wall Street Journal, AT&T's IPTV service, U-Verse, is having a tough go at it: Few subscriber adds, scalability problems, channel switching problems, bandwidth issues and video compression technology. The list reads like your average line-up of panels at an industry trade show, and according to the WSJ, it seems AT&T hasn't nailed a single one. Here's a quick rundown of some critiques of U-Verse from the report:

AT&T U-Verse had 3,000 users at the end of the fourth quarter 2006, unchanged from Q3 2006. The telco still plans on having 20.5 million customers by end of next year.

Problems continue to plague the Microsoft IPTV software, which is certainly not news. I believe rumors of these problems began at around the same time iPhone rumors started creeping up in the blogosphere.

"Channel switching" remains the key problem with the Microsoft software (it's slow.) Fast channel changing times has been touted as a key differentiator from the cable MSOs, unfortunately, so this issue is particularly troubling.

U-Verse needs 20 megabits/second of bandwidth to transmit video, according to the report. And UBS analyst John Hodulik says AT&T has been installing numerous patches to improve the network elements.

There are problems with the video compression technology AT&T is using to fit HDTV signals through its wires. AT&T is one of the first telcos to use the technology on such a large scale so the WSJ forgives them on this one.

Many consider the AT&T launch to be the case study for all major IPTV rollouts to follow. As FierceIPTV has reported in the past, it will push its broadband TV service, Homezone, while it works to solve the problems with U-Verse. The WSJ even hints that the telco may simply buy its own satellite-TV operator.

For more on the WSJ report:
- see this article [1] (sub. req.)