AT&T Beats Expectations, But Chases T-Mobile’s Subscriber Growth

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T-Mobile has certainly been a thorn in its side, but AT&T is holding its own against the challenger, whose marketing campaign has been pointed directly at AT&T’s subscribers.

AT&T’s profit in the fourth quarter was 53 cents per share on $33.2 billion in revenue, the company announced on Tuesday. That was higher than Wall Street’s estimates. While the company’s stock price was down initially on Wednesday morning, it was steadily climbing back after 10 a.m. ET.

AT&T added approximately 800,000 customers in the quarter 566,000 of those being the lucrative postpaid variety. That was down from 780,000 net postpaid adds in the fourth quarter of 2012, BGR noted, and less than T-Mobile’s expected announcement of 869,000 additions. That gap, however, is smaller on a percentage basis than it was in the third quarter.

T-Mobile’s "uncarrier" strategy has clearly paid off. The company has been luring customers away from its competitors by doing away with contracts that force wireless customers to stay with them unless they’re willing to pay a fee to break it. The carriers have recently started offering to pay those early-termination fees as the battle for customers gets more intense.

More good news for AT&T is that its churn rate fell to 1.11 percent last quarter a record low. So not that many customers are jumping ship. The bulk of T-Mobile’s adds seem to be coming from other directions.

AT&T also saw significant upgrades from new subscribers who wanted to pick up Apple’s iPhone 5s or a high-end Android smartphone. The carrier’s smartphone sales for the quarter were nearly 8 million; it activated a little more than 10 million in the year-ago quarter.

Verizon Wireless announced last week that it added 1.7 million subscribers in the fourth quarter, leading all carriers.

Follow senior online managing editor @Craig_Galbraith on Twitter.

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