AT&T’s churn in 3Q15
In the earlier parts of this series, we looked at AT&T’s (T) overall wireless revenue in 3Q15. The telecom company’s wireless revenue declined slightly YoY or year-over-year by ~0.04% to reach ~$18.3 billion in 3Q15. In the next two parts, we’ll focus on AT&T’s customer metrics in its overall domestic wireless operations for the quarter. Here, we’ll start with the carrier’s customer retention in its overall domestic wireless operations. AT&T’s postpaid churn increased both sequentially and YoY in 3Q15.
As we can see in the above chart, AT&T’s postpaid churn increased from ~0.99% in 3Q14 to ~1.2% in 3Q15. Sequentially, the postpaid wireless churn expanded from ~1.0% in 2Q15. For the first three quarters of 2015, AT&T’s postpaid churn was ~1.1%. This figure was slightly higher than the postpaid churn for the first three quarters of 2014 at ~0.97%.
AT&T’s churn remains higher than Verizon’s in 3Q15
Now let’s look at how AT&T’s postpaid customer retention compares to the other top US wireless players in 3Q15. Verizon (VZ) continued to lead. The telecom company’s postpaid churn decreased to ~0.93% in 3Q15 from ~1% in 3Q14.
Meanwhile, T-Mobile’s (TMUS) postpaid phone churn also dropped YoY to ~1.5% in 3Q15. In 3Q14, T-Mobile’s postpaid phone churn was ~1.6%. Please note that Sprint (S) has not yet reported its results for the quarter.
Instead of investing directly in AT&T’s stock, you can consider taking on diversified exposure to the telecom company by investing in the iShares MSCI USA Minimum Volatility ETF (USMV). The ETF invested ~1.7% of its holdings in the company at the end of August 2015.