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AT&T: We’ll Lease Phones If Customers Want It

AT&T is open to leasing unsubsidized handsets to supplement its current installment-payment programs, but subscribers are gravitating strongly to the company’s installment payment plans, said AT&T EVP/CFO John Stephens.

AT&T will join Sprint and T-Mobile in offering a lease option if customers want it, but “customer satisfaction” comes from owning devices after they have been paid off, he said during a conference call with analysts. He also said the difference in the total price of leasing and owning “isn’t measurable.”

In the third quarter ending Sept. 30, 71 percent of all AT&T postpaid smartphone purchasers chose a Next installment-payment plan, the company said in reporting its financial results. As a result, more than 40 percent of AT&T’s postpaid smartphone base is on AT&T Next installment-payment plans for unsubsidized phones. And about 66 percent of postpaid smartphone subscribers are on no-contract Mobile Share Value plans sold with unsubsidized phones.

In related comments, AT&T said its smartphone-upgrade rates are slowing, extending the lives of smartphones, because two thirds of postpaid-phone subscribers aren’t using subsidized phones.

On another topic, Stephens said net new DirecTv subscriptions in the U.S. picked up after the satellite-TV service was rolled out to almost all of AT&T’s 2,300 company-owned wireless stores in the quarter. A company statement cited “strong retail results in company-owned stores” and said it has enjoyed “early momentum from combined offers” of AT&T wireless and DirecTV service.

AT&T acquired DirecTv on July 25, almost one month into AT&T’s third quarter.

Separately, AT&T said the number of branded cellular net adds rose 2.2 percent to 755,000 from the year-ago quarter despite a sharp drop in postpaid-phone net adds. Branded net adds exclude MVNOs and connected device net adds such as connected cars.

The number of prepaid net adds surged 466,000 compared to a year-ago loss of 46,000, marking the best prepaid net-add quarter in almost eight years. Postpaid net adds, however, fell to 289,000 from the year-ago 785,000. That number includes a loss of 333,000 postpaid phone subscribers offset by 622,000 net adds of postpaid tablets and computing devices, such as mobile hot spots.

The prepaid numbers consist of AT&T-branded GoPhone service and Cricket-branded service.