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AT&T’s Postpaid Phone Churn Should Continue to Improve in Q2 2018

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AT&T’s postpaid phone churn in the second quarter

Earlier in this series, we learned about analysts’ expectations for AT&T’s (T) prepaid customer net additions in the second quarter. Now let’s talk about AT&T’s customer retention metric, or its churn rate.

AT&T’s postpaid phone churn rate should continue to improve in the second quarter mainly due to its wireless video bundle. In the first quarter, AT&T reported its best-ever first-quarter postpaid phone churn rate of 0.84%, improving both YoY (year-over-year) and sequentially.

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Peer comparison

If we compare the best mobile operators in the United States, we’ll find that Verizon (VZ) reported a postpaid phone churn rate of 0.80% in the first quarter. T-Mobile’s (TMUS) postpaid phone churn rate of 1.07% in the first quarter improved compared to both the preceding quarter and its churn rate of 1.18% in the first quarter of 2017. Meanwhile, Sprint (S) posted a postpaid phone churn rate of 1.68% in its fiscal fourth quarter of 2017.

Lower churn helps wireless service providers save on expenses related to acquiring customers, which in turn helps them to expand their operating margins.

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