uploads///Tel ATT prepaid add

AT&T’s Prepaid Customer Additions Dominated the Market in 1H15

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Sep. 8 2015, Updated 3:06 p.m. ET

AT&T’s prepaid customer additions in smartphones

In the previous part of this series, we learned that AT&T’s (T) postpaid phone users have been declining sequentially until 2Q15. We also learned that the telecom company’s prepaid and postpaid branded smartphone users were increasing sequentially during the same period. These are high-value customers compared to the company’s basic phone users.

During the recent analyst conference, the company highlighted how the prepaid segment contributed to the year-over-year (or YoY) growth in these branded smartphone users during 2Q15.

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According to the company, the net branded GSM (Global System for Mobile communications) smartphone customer additions between 2Q14–2Q15 were ~7 million. Approximately 4 million of these smartphone additions originated from the company’s prepaid segment. Moreover, Cricket contributed significantly to these prepaid smartphone additions during this period.

AT&T’s prepaid customer additions in 1H15

According to the company, its net prepaid customer additions in 1H15 were the highest among the key players in the US. On a net basis, AT&T’s prepaid customer additions were ~429,000 during 1H15. As we can see in the above chart, this figure was significantly higher than the net prepaid additions of Sprint (S) and T-Mobile (TMUS). Verizon (VZ) and America Movil’s (AMX) Tracfone had prepaid net losses during 1H15.

You may consider taking a diversified exposure to AT&T by investing in the iShares Core S&P 500 ETF (IVV), which held ~1.1% in AT&T on July 31, 2015. You may also consider the iShares Russell 1000 Value ETF (IWD). IWD held ~1.7% in the telecom company at the end of July.

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