AT&T Posts Best Quarterly Postpaid Gains In Almost 5 Years - Twice

AT&T Posts Best Quarterly Postpaid Gains In Almost 5 Years

UPDATED! Dallas — AT&T cited its Mobile Share Value Plans and Next trade-up program for its best quarterly postpaid subscriber gains in almost five years, but the 86 percent gain in postpaid net adds to 1.03 million were offset by a net loss of 405,000 prepaid subscribers.
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Dallas — AT&T cited its Mobile Share Value Plans and Next trade-up program for its best quarterly postpaid subscriber gains in almost five years, but the 86 percent gain in postpaid net adds to 1.03 million were offset by a net loss of 405,000 prepaid subscribers.

As a result, total net adds, including reseller subscriptions and connected devices such as car telematics systems, came in at 634,000, only slightly above the year-ago 632,000 and well down from the first quarter’s 1.06 million.

Cellular-equipped tablets accounted for 366,000 of the retail postpaid net adds, but a decline in retail prepaid tablet subscriptions dragged down the total tablet net adds to 250,000.

The prepaid decline came despite AT&T’s relaunch of the Cricket prepaid brand, but the new Cricket went nationwide only on May 19, or half way through the second quarter, but the company said Cricket churn is on the decline.

The number of Mobile Share and Mobile Share shared-data accounts continued to grow, reaching more than 41 million, or about 56 percent of retail postpaid connections. That’s up from the previous quarter’s 45 percent. About 44 percent of the postpaid smartphone customers are on Mobile Share Value plans, which offer lower service prices but are sold in conjunction with an unsubsidized device under the Next trade-up programs.

As a result, a growing percentage of postpaid subscribers have also opted for the company’s Next trade-up program. More than 50 percent of all second-quarter smartphone gross adds and upgrade phones were purchased under the Next program, or 3.1 million, up from 40 percent in the first quarter and only 15 percent in the fourth quarter.

 The company expects that percentage to rise in the third and fourth quarters because AT&T is rolling out next to its national retail agents.

In other product-related news, the company said 1.6 million postpaid smartphones were added to the network (combining purchases from new subscribers and upgrades from existing subscribers), yielding more than 700,000 smartphone net adds. Smartphones accounted for 92 percent of retail postpaid phone sales.

AT&T also said 63 percent of postpaid smartphone subscribers were using an LTE phone.

The subscriber gains and a best-ever postpaid churn rate of 0.86 percent drove up wireless revenues by 3.7 percent to $17.9 billion, but wireless operating income fell 7.5 percent to $4.3 billion. Wireless operating income margin fell to 24.1 percent from a year-ago 27.1 percent and the first quarter’s 28.3 percent.

Compared with Verizon’s wireless second-quarter metrics, AT&T was behind in wireless-revenues and revenue growth, operating income and income growth, operating margin, retail postpaid net adds, and total retail postpaid and repaid net adds combined.

Verizon wireless revenues rose 6.9 percent to $20.9 billion compared to AT&T’s 3.7 percent gain to $17.9 billion. Verizon wireless operating income was up 8.1 percent to $6.9 billion compared to AT&T’s decline of 7.5 percent to $4.3 billion. And Verizon’s wireless operating margin was 32.5 percent compared to AT&T’s 24.1 percent.

Verizon’s retail postpaid net adds rose 53 percent to 1.44 million compared to AT&T’s 86 percent gain to 1.03 million.

And Verizon’s combined postpaid and retail net adds of 1.43 million were higher than AT&T’s 621,000.

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