AT&T Third Quarter Mixed
October 24, 2013

Mixed Third-Quarter Numbers For AT&T As T-Mobile Turns Up The Heat

Michael Harper for - Your Universe Online

Cellular provider T-Mobile has spent the year making bold moves not normally taken by a large American carriers. From contract-less plans to offering early upgrades to their customers, T-Mobile has caused quite a stir in the industry, but the extent of this shake up had not yet been seen.

AT&T, the nation’s second largest carrier behind Verizon, just presented their third quarter earnings, which have so far shown little to no change since T-Mobile began playing hardball. AT&T recorded a profit of $3.8 billion, up from $3.6 in the same quarter last year. The carrier also doubled their new subscriber numbers over last year, bringing in as many as 363,000 new customers. In addition, it announced an even lower churn rate (the rate at which customers leave the service) than last quarter, down to 1.07 percent from 1.08 percent in the same quarter last year.

T-Mobile’s changes have boosted its numbers as well. Last quarter they added 1.1 million new subscribers, but after yesterday’s earnings call, it seems that Big Pink isn’t taking away as many customers from AT&T as it may have hoped.

AT&T execs praised their business, saying they’ve built a speedy and reliable network. Randall Stephenson, AT&T’s chairman and chief executive, also attributed some of this new growth to packages available through their U-verse cable and Internet offerings. According to Stephenson, 650,000 new subscribers signed up for U-verse high-speed Internet while another 265,000 signed new cable TV plans in the latest quarter.

Those new customers who joined AT&T were more likely to jump on a smartphone plan than a basic feature phone plan. The company moved 6.7 million smartphones last quarter, a record high for the third quarter. Yet Cnet is reporting that AT&T may be losing their feature phone customers either to new smartphonecustomers or to other carriers, such as T-Mobile. AT&T did sign up 363,000 new subscribers in the previous quarter, but this represents a dip in the numbers since last quarter. In the second quarter of this year, the carrier signed 551,000 new customers, and of the 363,000 new subscribers, the majority  signed up with tablet plans.

In other words, AT&T’s data plans are incredibly popular, and their feature phone customers seem to be either upgrading to these devices or leaving the network altogether. The carrier didn’t break down the numbers and say how many feature phone customers upgraded or left, but at this point it’s not entirely clear if they left for the competition. This answer won’t be made entirely clear until Sprint and T-Mobile themselves reveal their third quarter earnings.

AT&T also mentioned their plans to sell the rights to manage a group of cell towers to Crown Castle International Corp. for a total of $4.85 billion in cash. AT&T says they’ll use this cash stateside to improve their network stability and range. It is also in the final stages of closing a deal to buy prepaid carrier Leap Wireless for $4 billion total, thereby expanding their prepaid customer base.