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AT&T’s Postpaid Phone Churn Rate Could Rise in Q1

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AT&T’s postpaid phone churn rate

In this article, we’ll talk about AT&T’s (T) customer retention metric, or its churn rate. Wall Street analysts expect AT&T to report a postpaid phone churn rate of 0.92% in the first quarter compared to 0.84% in the first quarter of 2018, mainly due to intense competition in the telecommunications sector.

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In the fourth quarter of 2018, AT&T reported a postpaid phone churn rate of 1.00% compared to 0.89% in the fourth quarter of 2017. A rise in the churn rate is adverse for mobile operators because they have to deal with additional acquisition costs, which in turn has a negative impact on their operating margins. Thus, a rising churn rate could be a cause for concern for investors.

Peer comparison

Among the top four major US mobile operators, Verizon (VZ) is expected to have the best postpaid phone churn rate in the first quarter. It’s expected to report a postpaid phone churn rate of 0.83% in the quarter, while T-Mobile (TMUS) is expected to report a postpaid phone churn rate of 0.97%, and Sprint (S) is expected to report a postpaid phone churn rate of 1.85%.

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