uploads///Telecom ATTs Postpaid Churn

AT&T: Postpaid Churn Expected to Decrease Year-Over-Year in 4Q15


Jan. 26 2016, Updated 8:07 a.m. ET

AT&T’s postpaid churn in 4Q15

In the previous part of this series, we looked at Wall Street’s expectations for the momentum of AT&T’s (T) postpaid customer additions from its domestic wireless operations in 4Q15. In this part, we’ll move to another key customer metric for wireless telecoms—postpaid customer attrition. According to Wall Street analyst consensus, AT&T’s postpaid churn is expected to decline YoY (year-over-year) in 4Q15.

As you can see in the bar chart above, analysts expect the postpaid churn metric for AT&T’s domestic wireless operations to be at ~1.15% in 4Q15, compared with ~1.22% during 4Q14. This improvement in churn is particularly significant considering the metric has expanded YoY in the last two quarters.

In 3Q15, AT&T’s postpaid churn was ~1.2%, compared with ~0.99% in 3Q14. That figure was ~1.0% in 2Q15 and ~0.86% in 2Q14.

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Other players’ postpaid churn

Unlike AT&T’s, Verizon’s (VZ) and Sprint’s (S) postpaid churn decreased YoY to ~0.93% and ~1.5%, respectively, in 3Q15. Meanwhile, T-Mobile’s (TMUS) postpaid phone churn of ~1.5% in 3Q15 was also lower year-over-year.

Instead of taking on direct exposure to the stocks of players in the US telecom industry, you may consider diversified exposure to the space by investing in the iShares Russell 1000 ETF (IWB). The ETF held a total of ~2.3% in some of the US telecom companies at the end of December 2015.


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