AT&T's foray into the online streaming video business is slowly gaining ground.
The Dallas telecommunications giant disclosed in a Securities and Exchange Commission filing that it had added a net 300,000 customers to its DirecTV Now streaming service in the third quarter. That's compared to the 491,000 customers it added in the first half of the year.
Overall, the company warned that it had lost 90,000 US video subscribers, blaming a combination of the impact from several hurricanes, higher credit standards and competition from both traditional pay TV players and online alternatives.
AT&T is in the midst of transforming itself beyond providing you with basic phone, internet and wireless service. It also wants to be an entertainment powerhouse, as evidenced by its acquisition of satellite TV provider DirecTV and its pending deal to buy Time Warner, the home of "Superman" and "Game of Thrones." The results were likely helped by a promotion that offered DirecTV Now at a discount when budgeted with its wireless plans.
The results underscore the tricky transition AT&T faces as its core wireless business -- once its bread and butter -- continues to come under pressure by rivals such as T-Mobile.
AT&T warned that it had 900,000 fewer handset equipment upgrades than a year ago, although it said the decline didn't affect its customer growth and that turnover levels were still low.
The company blamed the hurricanes and an earthquake in Mexico, where it owns several wireless assets, on revenue falling $90 million and its pre-tax earnings to decline by $210 million. It expects further reductions in the fourth quarter.
The company, however, also maintained its 2017 forecast of mid-single digit adjusted earnings growth.
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