What Drove AT&T’s Prepaid Net Additions in 3Q17?
AT&T’s prepaid customer growth
AT&T (T) added a total of 324,000 net prepaid customers in 3Q17—significantly higher than the Wall Street analysts’ consensus estimate—with strength coming from the Cricket and AT&T Prepaid brands. AT&T’s prepaid customer base grew ~16.1% on a YoY (year-over-year) basis.
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Remember, expenses associated with prepaid customers are much lower than the expenses associated with postpaid subscribers, which makes them more profitable. Acquisition costs, maintenance expenses, and upfront expenses are all lower for prepaid customers.
Peer comparison of prepaid net additions in 3Q17
By comparison, in 3Q17, Verizon Communications (VZ) and T-Mobile (TMUS) added 139,000 and 226,000 net prepaid subscribers, respectively. Meanwhile, Sprint (S) gained 95,000 net prepaid subscribers in fiscal 2Q17 (quarter ending September 2017).
At the end of 3Q17, T-Mobile’s prepaid customer base was the largest at 20.5 million customers. AT&T and Sprint followed with 15.1 million and 8.8 million prepaid subscribers, respectively. Verizon reported 5.6 million prepaid customers.