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Q3 At&t likely the only major carrier to see net postpaid phone losses

October 20, 2016

 

AT&T is the only tier-one carrier in the nation that will report a net loss of postpaid phone customers during the third quarter, Wells Fargo Securities predicted.

 

The second-largest operator in the U.S. “was in ‘protecting its base’ mode during Q3,” Jennifer Fritzsche of Wells Fargo wrote in a research note, and likely lost 200,000 postpaid phone users during the period. AT&T is expected to post total net postpaid adds of 300,000, though, and an additional 300,000 net prepaid customers.

 

Those figures reflect AT&T’s continued focus of retaining high-end postpaid users and growing its base of more profitable prepaid consumers, Fritzsche observed.

 

“We believe that AT&T’s focus on retaining customers should generate strong postpaid churn of 1.07 percent (down from 1.16 percent in Q3 ’16) vs. Street expectations of 1.11 percent,” she wrote. “We project that AT&T’s postpaid phone-only ARPU will be $60.20, up .7 percent sequentially but down 1 percent year over year.”

 

Meanwhile, all of AT&T’s major rivals will report net postpaid phone gains during the quarter, Fritzsche predicted. Sprint said yesterday that it saw 347,000 net postpaid phone additions during the quarter, far outpacing analysts’ estimates. Verizon is expected to have added 92,000 net postpaid phone additions during the quarter, contributing to total net postpaid gains of 657,000. And Wells Fargo expects T-Mobile to post 992,000 net postpaid phone subscribers and an additional 715,000 prepaid phone customers.

 

Competition ramped up in the third quarter after a relatively placid second quarter thanks largely to the highly anticipated release of the iPhone 7, which enjoyed unprecedented – if relatively short-lived – promotional support from every major U.S. operator. While those promotions have largely ceased, the market is sure to become even more active as the holiday season approaches.

 

And that should provide more opportunities for both T-Mobile and Sprint to close the gap on Verizon and AT&T.

 

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