AT&T Gains 2 Million Wireless Users in Q3, Revenues Jump 2.5 Percent

By Todd R. Weiss  |  Posted 2014-10-23 Print this article Print
AT&T quarterly report

AT&T also saw postpaid customer numbers jump, but net income fall as the world's top four carriers slash prices to gain customers.

AT&T gained 2 million wireless customers in the third quarter, helping drive up the carrier's wireless sales 5 percent and overall revenues 2.5 percent over the same period last year.

In announcing the quarterly financial results Oct. 22, AT&T officials said the company generated $33 billion in revenue in the third quarter, and $18.3 billion of that came from the carrier's wireless business, which saw revenues increase 4.9 percent.

However, net income came in at $3 billion, down from the $3.8 billion in the third quarter of 2013.

Company executives pointed to the wireless business and the expansion of its fast fiber network efforts as key drivers for helping increase revenues.

"Our strategy is on track and our investments in giving customers best-in-class service to access content everywhere and on any screen continue to pay off," AT&T Chairman and CEO Randall Stephenson said in a statement. "We had strong subscriber growth in wireless and U-verse, and our strategic business services revenues continued to post double-digit growth."

The wireless numbers were good for the company. Along with gaining 2 million new wireless device subscriptions, AT&T also added about 785,000 postpaid customers, who are customers who have monthly service contracts. The number of new postpaid customers was more than double the number that were added in the same quarter a year ago.

Those figures also include some 466,000 new postpaid smartphone users, as well as 434,000 new postpaid tablet subscribers, according to AT&T figures.

AT&T did see a loss of about 140,000 prepaid phone customers for the quarter, compared to a gain of 192,000 prepaid users one year ago. Part of that was due to what AT&T officials called "an expected reduction in [its] Cricket [prepaid] subscribers as the company transitions the customer base" to other services.

The company's wireless churn rate—the number of customers who leave for services from competitors—totaled 1.36 percent for the quarter overall, compared to 1.31 percent for the same period one year ago. The churn rate for postpaid customers, however, was 0.99 percent for the quarter, compared to 1.07 percent one year ago, giving AT&T it's best-ever third-quarter churn rate, according to the company.

As part of its third-quarter report, AT&T officials said they expect the carrier's full-year revenue growth to be in the 3- to 4- percent range.

AT&T is the second largest wireless carrier in the United States, after Verizon.

Previously, in the second quarter, AT&T posted $32.6 billion in revenue, up a modest 1.6 percent year-over-year. The company's profits in second quarter fell to $5.6 billion, from $6.1 billion in 2013.

AT&T's earnings have apparently been affected by the price wars among the four major carriers over the last few months as they fight to poach customers and revenue from each other. Sprint offered Family Share Pack plans in August with more shared data, then AT&T countered with double-data packages of its own in September. Sprint and Verizon responded to that offer earlier in October. Having the carriers compete over prices is great for consumers, but is certainly causing havoc for the financial bottom lines of the companies.

On Oct. 21, Verizon reported its third-quarter earnings numbers, including $31.59 billion in revenue, up 4.3 percent from the $30.3 billion posted in the same quarter one year ago. Its wireless unit captured another 1.5 million customers, according to an earlier eWEEK report.


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