Dallas – AT&T gained 854,000 net new postpaid subscriptions in the fourth quarter, up 51 percent from the year-ago quarter, with a 969,000 gain in postpaid tablet net adds offsetting a loss of 115,000 postpaid phone subscribers.
The carrier did, however, post 148,000 net new smartphone subscribers in the quarter.
For the full year, AT&T boasted 700,000 postpaid phone net adds and 5.6 million total net adds.
AT&T’s net-add performance in the quarter fell behind Verizon’s 1.99 million postpaid net adds, which included 672,000 phone net adds. The rest of Verizon’s postpaid net adds came mainly from LTE tablets.
In another sign of intensifying competition, AT&Ts postpaid churn rate rose to 1.22 percent from the year-ago quarter’s churn rate of 1.11 percent, which was an all-time fourth-quarter best.
AT&T’s total net adds grew 135 percent to 1.9 million from the year-ago quarter, thanks to a 226 percent gain in connected device net adds to 1.3 million, including 800,000 connected cars.
Connected-device net adds offset a loss of 180,000 prepaid subscribers and a loss of 65,000 reseller subscribers. The prepaid losses came from AT&T’s GoPhone prepaid brand, while the number of Cricket-brand prepaid subscribers increased in the quarter.
AT&T also reported that the share of smartphone gross adds and upgrade phones purchased without subsidy on Next installment-payment plans rose to 58 percent, or 5.9 million, up from the third- and second-quarter’s 50 percent and 40 percent in the first quarter.
As a result, more than a quarter of postpaid subscribers, or 15 million, are on the Next installment plan.
The number of gross adds coming from consumers who brought their own device to the network hit 386,000, down sequentially from the third quarter’s record 460,000.
In other metrics, the company said:
–91 percent of phones sold in the quarter were smartphones.
–83 percent, or 56.8 million, of postpaid phone subscribers were using smartphones, up from the third quarter’s 81 percent.
–75 percent of postpaid smartphone subscribers had an LTE phone.
–Mobile Share and Mobile Share Value accounts, in which families share data buckets, more than doubled year-over-year to 18.4 million accounts, accounting for almost 70 percent of postpaid subs, up from the third quarter’s 62 percent.
All told, wireless revenues grew 7.7 percent in the quarter to $19.9 billion, but wireless operating expenses rose 14.8 percent to $16.6 billion, driving down wireless operating income by 18.1 percent to $3.2 billion. Expenses rose because of costs associated with the acquisition of prepaid carrier Leap combined with additional equipment costs resulting from record gross adds of 10.1 million postpaid smartphones.
Wireless operating margins fell to 16.3 percent from the year-ago 21.4 percent.