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AT&T Wireless Subs Up, Next Plans Take Off In Q1

Dallas – AT&T expanded its wireless subscriber base in the competitive first quarter by promoting Mobile Share Value Plans and launching an early upgrade program for contract subscribers, enabling the company to deliver its best first-quarter gain in postpaid net adds in five years, said senior executive VP/CFO John Stephens.

AT&T also made strides in changing the handset subsidy model in the quarter, when activations of unsubsidized smartphones under the Next trade-up program accounted for 40 percent of all postpaid smartphone gross adds and upgrades, up from 15 percent in the fourth quarter, he said.

For the quarter, the company posted a 7 percent gain in wireless revenues to $17.9 billion and an 8.1 percent gain in wireless operating income to $5.1 billion.

The gains were helped by a rising share of Mobile Share accounts opting for big buckets of data. Of 11.3 million Mobile Share accounts, 46 percent shared at least 10GB of data, up from the fourth quarter’s 27 percent, the company said.

Postpaid net adds rose 111 percent from the year-ago quarter to 625,000, which was also up from the fourth-quarter’s 566,000 postpaid net adds.

In the previous quarter, AT&T’s postpaid net adds of 566,000 were well behind Verizon’s 1.57 million and T-Mobile’s 869,000. Verizon and T-Mobile haven’t yet reported their first-quarter results.

AT&T’s total net adds hit 1.06 million, up 264 percent from the year-ago quarter and up from the fourth quarter’s 809,000.

Total net adds include a decline of 50,000 retail prepaid subscribers, a decline of 206,000 reseller subscribers, and a net gain of 693,000 connected-device subscriptions, up 61 percent from the year-ago quarter.

In citing Next program uptake, AT&T said the trade-up program accounted for 2.9 million smartphones sold in the quarter, up from the fourth quarter’s 1 million.

Besides saving money by eliminating handset subsidies, Next “accelerates the move to LTE,” a more efficient network technology, as consumers trade up their phones more frequently, said Stephens during an investors’ conference call. About 57 percent of postpaid smartphones on the network feature LTE, he said. The figure at the end of the fourth quarter was “more than half,” the company previously said.

The launch of new Mobile Share Value plans in the quarter “made it easier for subscribers to move off the subsidy model,” he added.

The number of postpaid subscribers on a Mobile Share or Mobile Share Value account grew to 32.6 million, or 45 percent of postpaid subscribers, from the fourth quarter’s 21.1 million and were up more than three times compared to the year-ago quarter.

All told, 5.8 million postpaid smartphones were activated compared to 6 million in the year-ago quarter, 7.9 million in the fourth quarter and 6.7 million in the third quarter

That helped boost the percentage of postpaid subscribers with an LTE phone to 57 percent, up from more than 50 percent in the fourth quarter.

In other matters, Stephens said that following the acquisition of CDMA carrier Leap Wireless and its Cricket brand in mid-March, AT&T will launch a “new Cricket brand” in the second quarter to get more aggressive in the prepaid market. The new Cricket brand will focus on simple plans with affordable devices and plans, he said, and it will expand its reach to more than 3,000 distribution points.