uploads///Telecom Q Prepaid Net Additions

AT&T’s Prepaid Net Additions in 4Q17

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Feb. 22 2018, Updated 9:07 a.m. ET

AT&T’s prepaid customer growth

Earlier, we discussed AT&T’s (T) postpaid phone customer net additions over the last few quarters. In this part, we’ll look at AT&T’s prepaid customer net additions. AT&T’s prepaid subscriber growth continued to be strong in 4Q17. It added 140,000 net prepaid customers in 4Q17, with strength coming from the Cricket and AT&T Prepaid brands. That figure, however, was significantly lower than analysts’ estimate. AT&T’s prepaid customer base grew ~13.3% year-over-year.

Costs associated with prepaid subscribers are much lower than those associated with postpaid subscribers, making prepaid subscribers more profitable. Acquisition, maintenance, and upfront expenses are all lower for prepaid customers.

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Peer comparison: Prepaid net additions

In comparison, in calendar 4Q17, Sprint (S) and T-Mobile (TMUS) added 63,000 and 149,000 net prepaid subscribers, respectively. Meanwhile, Verizon (VZ) lost 184,000.

At the end of 4Q17, T-Mobile’s prepaid customer base was the largest, at 20.7 million customers. AT&T and Sprint followed, with 15.3 million and 9.0 million prepaid subscribers, respectively. Verizon had 5.4 million prepaid customers.

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