AT&T’s prepaid customer growth
In the previous article, we learned about the expectations for AT&T’s (T) postpaid phone customer net additions in the second quarter. Let’s now take a look at the kind of prepaid customer net additions we can expect from AT&T.
Wall Street analysts expect 250,000 prepaid customer net additions from AT&T in the second quarter given the increasingly intense competition in the prepaid space.
In the first quarter, AT&T gained a total of 241,000 net prepaid customers, with strength coming from its Cricket and AT&T Prepaid brands. The company’s number of wireless prepaid customers grew ~13.2% YoY (year-over-year) to reach 15.7 million by the end of March.
By the end of the first quarter, Verizon’s (VZ) number of prepaid customers had fallen ~6.7% YoY to reach 5.1 million, whereas T-Mobile’s (TMUS) number of prepaid customers had risen ~3.4% YoY to reach 20.9 million. Meanwhile, Sprint’s (S) number of prepaid customers had risen ~3.5% YoY to reach 9.0 million by the end of its fiscal fourth quarter of 2017.
In the first quarter, Sprint and T-Mobile gained 170,000 and 199,000 net prepaid subscribers, respectively. Meanwhile, Verizon lost 335,000 prepaid customers during the same period.
Prepaid subscribers are more profitable than postpaid ones. The costs related to prepaid customers are much lower than the costs related to postpaid customers. Acquisition expenses, maintenance costs, and up-front costs are all lower for prepaid customers.