AT&T’s postpaid phone churn rate
Earlier, we learned about the expectations for AT&T’s (T) prepaid subscriber net additions in the fourth quarter. Now let’s talk about the company’s customer retention metric, or its churn rate.
Analysts expect AT&T to report a postpaid phone churn rate of 0.97% in the fourth quarter compared to 0.89% in the fourth quarter of 2017 mainly due to intense competition in the telecommunications sector.
In the third quarter, AT&T had reported a postpaid phone churn rate of 0.93%, up from 0.82% in the second quarter and up from 0.84% in the third quarter of 2017. A rising churn rate is adverse for telecommunications companies because they have to deal with additional acquisition expenses, which in turn have an adverse impact on their operating margins. Thus, a rise in a company’s churn rate could be a cause for concern for investors.