AT&T’s Wireless Revenue Fell in 4Q15



AT&T’s wireless revenue in 4Q15

Earlier, we learned about the marginal YoY (year-over-year) increase in AT&T’s (T) postpaid customers during 4Q15. We also learned about the growth in AT&T’s postpaid phone-only ARPU (average revenue per user) with Next billings in that quarter. Overall, AT&T’s wireless revenue from domestic operations fell YoY by ~4.9% to ~$18.9 billion in 4Q15. Earlier in 3Q15, the component’s revenue had decreased YoY by ~0.04%. Both the service revenue and equipment revenue declined YoY during 4Q15. However, out of both these revenue streams, the rate of decrease in the wireless segment’s equipment revenue was relatively high.

Article continues below advertisement

AT&T’s wireless equipment revenue in 4Q15

AT&T’s wireless equipment revenue fell significantly by ~14.9% YoY to reach ~$4.1 billion in 4Q15. In 3Q15, this stream had grown by ~11% YoY. As per the company, lower YoY sales of handset units and equipment during 4Q15 negatively affected the equipment revenue stream.

AT&T’s wireless service revenue in 4Q15

In terms of profitability, service revenue is typically the key revenue stream for wireless players including AT&T, Verizon (VZ), Sprint (S), and T-Mobile (TMUS). During 4Q15, the overall YoY decline in AT&T’s unit service revenue in its wireless component was ~7.8%. Overall, AT&T’s wireless service revenue fell by ~1.7% YoY to ~$14.8 billion in 4Q15. Earlier in 3Q15, this stream had decreased by ~2.1% YoY.

For diversified exposure to select telecom companies in the US, you could consider investing in the SPDR S&P 500 ETF (SPY). The ETF held a total of ~2.4% in AT&T, Verizon, CenturyLink (CTL), Frontier Communications (FTR), and Level 3 Communications (LVLT) at the end of December 2015.


More From Market Realist