The Wall Street Journal-20080116-AT-amp-T Internet-TV Project Is Set Back by Battery Defects
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AT&T Internet-TV Project Is Set Back by Battery Defects
In the latest setback to AT&T Inc.'s effort to roll out an Internet- based TV service, the telecommunications giant is replacing 17,000 backup batteries in neighborhoods nationwide after a few exploded or started fires.
The batteries were tucked in outdoor cabinets housing equipment for AT&T's U-verse TV service. In two instances, exploding batteries damaged surrounding property, AT&T said. In two other cases, batteries somehow caused small fires, which were quickly extinguished, according to the company. No one was hurt in the fires or explosions, AT&T said.
The batteries were made by Avestor, a Quebec company that made lithium-metal-polymer batteries. Avestor went bankrupt in October 2006 and has since closed. AT&T wouldn't disclose the cost of the batteries or replacement effort. Some analysts said they expect the situation to set the company back a few million dollars.
"Normally, we would work with a vendor to diagnose problems and develop solutions," AT&T said in a statement. "We can't do that in this case."
The batteries will be replaced as quickly as possible, the San Antonio company said. AT&T has about 400,000 backup batteries made by other companies in its network.
AT&T has experienced a number of problems and delays in rolling out U-verse, an Internet-based TV service, but most have been software related. The battery issue won't affect TV service, the company said. At the end of the third quarter, AT&T had 126,000 U-verse subscribers and expects to have 1 million by the end of this year.
AT&T was first alerted to a battery mishap in October 2006. The company hired an outside firm to evaluate any danger presented by the Avestor batteries and learned the risk was as low or lower than similar batteries used by municipalities and other phone and cable companies, AT&T said. "However, these batteries no longer meet performance requirements, " AT&T spokesman Michael Coe said. "There have been several of these incidents, and that's unacceptable."
