Why Did AT&T’s Wireless Service Revenue Worsen?



AT&T’s wireless service revenues

Let’s look at the two important segments contributing to AT&T’s (T) wireless revenues. AT&T’s wireless equipment revenues comprise the smaller portion of its revenues, whereas the larger part originates from its wireless service revenues.

The declining trend in the combined domestic wireless operations service revenues continued during 3Q17. In 3Q17, AT&T reported combined domestic wireless operations service revenues of $14.5 billion, a 2.8% reduction year-over-year (or YoY).

This reduction in the wireless service revenue is due to lost overage revenues and rate-plan optimization, mostly originating from single-line users after the introduction of unlimited offerings.

AT&T’s management expects its wireless service revenue growth to stabilize in early 2018.

Performance of other US wireless carriers

Now let’s analyze the growth in wireless service revenues of the other major US wireless carriers in 3Q17. Sprint’s (S) wireless service revenues declined ~6.1% YoY to reach $5.6 billion. Verizon’s (VZ) wireless service revenues fell ~5.1% YoY to reach $15.8 billion. T-Mobile’s (TMUS) wireless service revenues rose ~7.0% YoY to reach $7.6 billion.

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