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What AT&T’s Postpaid Phone Churn Rate Signals

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AT&T’s postpaid phone churn rate

AT&T (T) is focusing on reducing its postpaid phone churn rate, as lower churn rates are favorable for mobile operators. A higher postpaid phone churn rate hurts companies’ operating margins.

In its recent earnings, AT&T posted its best-ever first-quarter postpaid phone churn rate of 0.84%, improving year-over-year (or YoY) and sequentially. AT&T’s management attributed this improvement to the wireless-video bundle. 

This trend could be significant given that T-Mobile (TMUS) and Sprint (S) have made much of their capability to attract customers from other mobile operators such as Verizon (VZ) and AT&T.

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AT&T’s peer comparison of postpaid phone churn rate

If we compare the best telecom players in the US, we’ll find that Verizon reported a postpaid phone churn rate of 0.80% in the first quarter. Sprint reported a postpaid phone churn rate of ~1.7% in the fiscal fourth quarter of 2017 (quarter ended March 2018). T-Mobile’s postpaid phone churn rate of ~1.1% in the first quarter improved from both the preceding quarter and its churn rate of ~1.2% in the first quarter of 2017.

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