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AT&T Sees Rapid Q2 Growth In No-Subsidy Phones

Dallas – About half of AT&T’s postpaid smartphone customer base will be on no-device-subsidy Mobile Share Value pricing plans by the end of the second quarter ending June, and that percentage will grow to about two-thirds by year’s end, the company announced.

Consumers who purchase AT&T’s no-subsidy phones can pay full price up front or pay off the device on an installment plan, but AT&T installment plans are not available through all retail channels.

In addition, AT&T said, no-contract smartphone sales under the carrier’s Next trade-up program will account for about 50 percent of the carrier’s smartphone sales, or about 3.2 million units, in the second quarter ending June, AT&T forecast.

Under Next, consumers pay a monthly fee to get an unsubsidized smartphone and be eligible for an early upgrade to a new phone with no down payment, activation fee, or upgrade fee.

Growth in the program could presumably lift smartphone sales for vendors and dealers.

In related comments, AT&T said its Next and Mobile Share Value plans are producing higher equipment revenues and lower service revenues and ARPU, and as a result, AT&T doesn’t expect service-revenue growth in the second quarter. The company also said it expects second-quarter wireless service EBITDA margins “to be pressured year-over-year due to the increased sales activity and strong customer movement to the no-device-subsidy Mobile Share Value plans.”