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Could Competition Hurt AT&T in the Future?

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Aug. 23 2018, Published 7:51 a.m. ET

Fierce competition among telecoms

In the second quarter, AT&T (T) grew combined domestic wireless operations service revenue for the first time year-over-year in more than four years. It excluded the new revenue recognition accounting standard. However, the wireless industry continues to be competitive. That’s mainly because the two top cable companies—Comcast (CMCSA) and Charter Communications (CHTR)—have introduced their own wireless operations with the help of Verizon’s (VZ) network.

In addition, on August 15, T-Mobile (TMUS) launched an Un-Carrier move called Team of Experts. There’s also an upcoming iPhone cycle, which could increase competition among US national wireless carriers.

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AT&T’s wireless service revenue

In the second quarter, AT&T reported combined domestic wireless operations (or AT&T Mobility) service revenue of $13.7 billion, a ~5.5% reduction YoY (year-over-year). However, it’s important to note that excluding the new revenue recognition accounting standard, the revenue rose ~0.2% YoY to $14.5 billion. AT&T continues to expect positive YoY wireless service revenue growth on a comparable basis in 2018.

In comparison, Verizon posted wireless service revenue of $15.8 billion in the second quarter, up ~0.8% YoY. T-Mobile’s service revenue rose ~6.5% YoY to $7.9 billion, while Sprint’s (S) service revenue from the wireless component declined ~4.6% YoY to $5.5 billion.

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