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ATT shares jump 5 percent

From news services

NEW YORK — AT&T Inc. today raised its dividend 12.7 percent, announced a share buyback and set a long-term target for its TV service, which is delivered over phone lines, saying it will be available to 30 million customers by 2010.

Shares of the telecommunications company jumped more than 5 percent in morning trading.

The TV announcement by chief executive Randall Stephenson reinforces AT&T’s commitment to the service, known as U-verse. Recent news reports said the San Antonio-based company was in talks to acquire satellite TV broadcaster EchoStar Corp., which would have given the company a different route to reach customers. Stephenson told analysts the new target includes customers in the Southeastern states formerly served by BellSouth Corp., which AT&T acquired late last year.

The U-verse rollout has been delayed several times. A month ago, AT&T trimmed its coverage target for the end of next year to 17 million homes from 18 million. The delay was due to a shift in resources to the former BellSouth. AT&T expects to spend between $4.5 billion and $5 billion on U-verse through 2008.

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The company said it will buy back 400 million shares, which represent about 7 percent of the company’s stock, would cost $15.16 billion. AT&T said it expects to complete the repurchase by the end of 2009.

The company said the new repurchase plan supersedes an existing one announced in 2006. AT&T bought $13 billion in shares under that authorization.

AT&T’s dividend will rise to 40 cents from 35.5 cents. It will be paid Feb. 1 to shareholders of record on Jan. 10. the telecommunications company said Tuesday.

AT&T shares rose $2.10, or 5.5 percent, to $40 in morning trading Tuesday.

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