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Why AT&T Expects Its Wireless Service Revenues to Grow in 2018

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AT&T’s wireless service revenue

The declining trend in AT&T’s (T) combined domestic wireless operations service revenues continued in the first quarter. In the first quarter, AT&T had reported combined domestic wireless operations service revenue of $13.4 billion, an ~7.4% reduction year-over-year (or YoY). 

This reduction in its wireless service revenue is primarily due to its lost overage revenues and rate-plan optimization by single-line users after the introduction of unlimited offerings.

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During the JPMorgan Global Technology, Media, and Communications Broker Conference held on May 15, Randall Stephenson, AT&T’s CEO, spoke about the growth in AT&T’s wireless service revenues. Stephenson noted that AT&T expects combined domestic wireless operations service revenue to be flattish YoY in the second quarter. 

Stephenson noted, “Third and fourth quarter service revenues are growing again. And so that becomes a tailwind for the mobile subscriber—for the mobile business, and so keep subscribers growing.”

Performance of other US wireless carriers

Let’s evaluate the growth in wireless service revenues of the other major US (SPY) mobile operators in the first quarter. Sprint’s (S) wireless service revenues decreased ~3.0% YoY to reach $5.6 billion. Verizon’s (VZ) wireless service revenue declined ~2.4% YoY to reach $15.4 billion. T-Mobile’s (TMUS) wireless service revenues increased ~6.5% YoY basis to reach $7.8 billion.

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