uploads///Telecom ATTs Postpaid Churn

Inside AT&T’s Postpaid Retention: How Long Can It Keep Improving?

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Apr. 22 2016, Updated 11:06 a.m. ET

AT&T’s postpaid churn in 1Q16

Wall Street expects AT&T’s (T) YoY (year-over-year) postpaid customer attrition to increase in 1Q16. According to analysts, the company’s postpaid churn metric is expected to be ~1.08% in 1Q16. We should note that in 1Q15, this figure was at 1.02%.

Earlier in 4Q15, AT&T’s postpaid churn of ~1.18% was lower than the comparable attrition figure of ~1.22% in 4Q14. This YoY improvement in churn is especially significant because its postpaid churn had already increased YoY in 3Q15 and 2Q15.

Inside AT&T's Postpaid Retention: How Long Can It Keep Improving?

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Postpaid churn of major wireless players

Despite the YoY improvement in AT&T’s postpaid churn, Verizon (VZ) remained the best in this metric among the top four US wireless players in 4Q15. All the top four US mobile players witnessed YoY decline in postpaid attrition metrics during that quarter.

In 4Q15, the postpaid churns for Verizon and Sprint (S) were ~0.96% and ~1.62%, respectively. T-Mobile’s (TMUS) postpaid phone churn was ~1.46% in 4Q15.

For diversified exposure to select telecom companies in the US, you might consider investing in the SPDR S&P 500 ETF (SPY). SPY held a total of ~2.8% in AT&T, Verizon, CenturyLink (CTL), Frontier Communications (FTR), and Level 3 Communications (LVLT) at the end of March 2016.

In the next part, we’ll look into prepaid customers.

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