What Could Happen to AT&T’s Net Acquisitions of Prepaid Customers in 1Q16



AT&T’s net prepaid additions in 1Q16

Wall Street anticipates that AT&T’s (T) prepaid customer growth has maintained momentum in the domestic wireless space in 1Q16. According to the consensus analyst estimate, the wireless carrier’s net prepaid additions are expected to reach ~0.30 million in 1Q16, as compared to net prepaid additions of ~0.1 million customers in 1Q15.

What Could Happen to AT&T's Net Acquisitions of Prepaid Customers in 1Q16

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AT&T’s net prepaid additions in 4Q15

On a net basis, AT&T added ~0.47 million prepaid customers in 4Q15. According to the company, GoPhone and Cricket both witnessed net customer additions during that quarter.

Additionally, according to AT&T, around ~75% of Cricket’s gross customer additions were on rate plans with a minimum of $50 in 4Q15.

Prepaid customer acquisitions of the other US players in 4Q15

During 4Q15, on a net basis, Verizon (VZ) and Sprint (S) continued to lose prepaid customers. The net prepaid customer losses of Verizon and Sprint platform reached ~0.16 million and ~0.49 million, respectively, during the same quarter. Meanwhile, T-Mobile’s (TMUS) prepaid net additions were ~0.47 million in 4Q15.

For diversified exposure to telecom companies in the US, you might consider investing in the iShares Russell 1000 Value ETF (IWD). IWD held a total of ~2.7% in AT&T, Verizon, Level 3 Communications (LVLT), CenturyLink (CTL), and T-Mobile at the end of March 2016.

Now let’s take a look at AT&T’s dividend yield and valuation multiples.


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