AT&T’s postpaid churn in 1Q16
In the last part of the series, we learned that on a net basis, AT&T (T) added ~129,000 postpaid customers in its domestic operations in 1Q16. We also learned that the carrier’s YoY (or year-over-year) postpaid customer growth was significantly lower than that of Verizon (VZ) and T-Mobile (TMUS) in 1Q16. In this article, we’ll look at the carrier’s customer retention in these domestic wireless operations. AT&T’s postpaid churn increased YoY in 1Q16.
As we can observe in the above bar chart, the telecom company’s postpaid churn of ~1.1% in 1Q16 was higher than the comparable metric of ~1.0% in 1Q15. Here you should note that the wireless player’s postpaid churn improved YoY in 4Q15.
Verizon’s postpaid churn is better than AT&T’s in 1Q16
In 1Q16, Verizon’s postpaid retention remained better than that of AT&T’s. Verizon’s postpaid churn improved YoY in 1Q16 to ~0.96%. Earlier in 1Q15, the metric for the wireless carrier was at ~1.0%. Meanwhile, in T-Mobile’s case, the postpaid phone churn increased from ~1.3% in 1Q15 to ~1.33% in 1Q16.
Sprint (S) has not yet disclosed its results for fiscal 4Q15 (calendar 1Q16). The carrier will report its fiscal 4Q15 results on May 3, 2016. Earlier in fiscal 3Q15, Sprint’s postpaid churn had improved YoY to ~1.6% from ~2.3% in fiscal 3Q14.
Instead of getting direct exposure to stocks in the US telecom industry, you can consider diversified exposure to the space by investing in the iShares Core S&P 500 ETF (IVV).
The ETF held a total of ~2.8% in US telecom players at the end of March 2016.