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AT&T’s Net Additions of Postpaid Customers Declined in 2Q15

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AT&T’s net additions in postpaid segment

In the last part, we learned that AT&T (T) boasts the second best postpaid churn rate among the top wireless carriers in the US for 2Q15. The other key US wireless carriers are Verizon (VZ), T-Mobile (TMUS), and Sprint (S). AT&T’s postpaid churn increased year-over-year (or YoY) in 2Q15. Now we will look at AT&T’s customer additions during 2Q15.

AT&T’s net additions in the postpaid segment continued to decline YoY during 2Q15. The company reported net additions of ~410,000 customers in the postpaid segment during 2Q15. These net additions were dominated by computing devices and tablets. According to the company, it added ~600,000 computing devices and tablets during the quarter. However, the telecom company lost postpaid phone users on a net basis.

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According to the carrier, it lost basic phone subscribers. These users generate low unit revenue for the telecom company compared to smartphone users. For example, Apple (AAPL) iPhone users and Google (GOOG) (GOOGL) Android users tend to use high amounts of data. Thus, they generate more value for wireless carriers.

AT&T’s net additions of connected devices

On the positive side, growth in AT&T’s net additions of connected devices continued to be solid during 2Q15. AT&T added ~1.4 million connected devices during the quarter, including net additions of one million connected cars.

For diversified exposure to AT&T, you might consider investing in the SPDR S&P 500 ETF (SPY). This ETF had ~1% of its holdings in the integrated telecom company as of June 30, 2015. You might also consider investing in the Technology Select Sector SPDR Fund (XLK). XLK had invested ~4.6% of its holdings in AT&T at the end of June.

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