• by David Goetzl  @dgoetzl, July 26, 2007

AT&T plans to begin rolling out its telcoTV service in the Southeast before the end of the year, and also expects to be adding 10,000 subscribers a week by then.

That level would rapidly increase the distribution of the company's competing service to cable and satellite operators, which has hit some bumps in its launch. The company said this week that AT&T U-verse is in 51,000 homes--up considerably from the 13,000 three months ago, but behind fellow telcoTV provider Verizon and way below the leading cable and satellite providers.

The adoption rate of the service is also slow, with only about 1% of its 4 million potential customers signing up.

Still, AT&T CFO Rick Lindner said the results are "encouraging" and marketing efforts are being increased.

So far, the service is in 23 markets, concentrated on the West Coast, Texas and the Midwest; the potential for Southeast expansion comes after the acquisition of BellSouth. By the end of the year, some 8 million homes will be able to subscribe to the service, Lindner said.

From a revenue perspective, Lindner said on a conference call that more than 80% of subscribers are signing up for the higher-end packages with more channels and features, such as HD, and 65% are opting for the accompanying broadband service.

"Our confidence in the technology and the service quality is being confirmed by customer feedback, and we have a very positive outlook for AT&T U-verse video," he said while discussing second-quarter results.