AT&T’s postpaid phone net additions
In the previous part, we discussed AT&T’s (T) combined domestic wireless operations’ expected EBITDA[1. earnings before interest, tax, depreciation, and amortization] in 2Q17. In this article, we’ll look at the kind of postpaid phone net additions we could anticipate from AT&T in 2Q17.
Wall Street anticipates postpaid phone net additions to be negative for AT&T due to intensified competition in its traditional wireless business.
In 1Q17, AT&T lost 348,000 postpaid phone subscribers, up from losses of 67,000 net postpaid phone subscribers in 4Q16 and down from 363,000 net losses in 1Q16.
AT&T’s peer comparison of postpaid phone net additions in 1Q17
In our view, T-Mobile (TMUS) was the primary beneficiary of AT&T’s postpaid phone subscriber losses. In comparison, T-Mobile added 798,000 postpaid phone net customers in 1Q17, whereas Verizon (VZ) lost 289,000 postpaid phone customers in 1Q17. Sprint (S) gained 42,000 postpaid phone net customers in fiscal 4Q16 (quarter ending March 2017).
Among the postpaid phone subscribers, smartphone users are of particular interest to telecom companies. There is comparatively higher data usage among users of smartphones like Google’s (GOOG) Android devices or Apple’s (AAPL) iPhone. As a result, smartphone users are the most profitable customer set for mobile carriers.
In the next article of this series, we’ll discuss the postpaid phone churn rate that we could expect from AT&T in 2Q17.