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AT&T subscriber growth better than expected in the first quarter

Posted: , by Daniel P.

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AT&T subscriber growth better than expected in the first quarter
This earnings season marks the first quarter since AT&T lost its iPhone exclusivity in the US to Verizon. Not even a quarter, actually, since Verizon's iPhone 4 went on sale February 10th. So how did AT&T fare?

Not that bad, it turns out, according to the just released Q1 earnings. Subscriber growth was rather soft at 62 000 net increase in contract customers, but it was still higher than Wall Street's analysts expectation for AT&T to actually lose about 83 000 subscribers.

The carrier's earnings were in line with analysts' predictions, though, to the tune of $3.4 billion. AT&T only reported growth in postpaid ARPU (average revenue per user), but didn't list the data for people on contract. Still, net profit is better than the $2.5 billion for the same period last year, thanks no doubt to that same iPhone 4.

Revenue also almost hit analysts' expectations, at $31.25 billion. Carriers work with much lower profit margins than companies like Apple, Google or Microsoft, which would laugh at 11% profits, since they make double or even triple that easily, but, of course, they don't have a carrier's capital expenditures.

Interesting takes from the quarterly report was that AT&T had the best ever smartphone sales quarter - 5.5 million sold - and iPhone activations increased with a million to 3.6 million, compared to last year's Q1, 23% of which have been new to AT&T. There is an interesting claim on page 9 of the investor presentation slides - it says "iPhone 4 churn same as 1Q10", as you can see on the slide below.

AT&T's shares were up in pre-market trading after the earnings release, and Verizon is due to report tomorrow - we'll keep you posted about Big Red's performance in the first quarter. The second quarter will be even more interesting, with full three months of Verizon iPhone 4 sales, and high-end Android phones on AT&T.

source: AT&T

AT&T subscriber growth better than expected in the first quarter

12 Comments
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posted on 20 Apr 2011, 08:06 2

1. baller to all (unregistered)


iphone sucks, who cares, yesterdays phone, ANDROID is the world's # 1 mobile OS!!

posted on 20 Apr 2011, 12:07 4

9. davecann2 (Posts: 460; Member since: 15 Mar 2011)


Be wary wary quiet... I'm hunting twolls!

posted on 20 Apr 2011, 14:59 1

10. BobbyTaba (Posts: 316; Member since: 11 Aug 2010)


I like android too but its a OS calm down.

posted on 20 Apr 2011, 09:10 1

2. 62,000 not enough (unregistered)


"62,000 Net New" Way to put a positive spin on everything ATT... AT&T, the country's largest telecommunications company, on Wednesday said the first quarter saw the addition of 62,000 net new subscribers on contract-based plans, a record low. In the same quarter a year ago, the figure was 512,000. In several previous quarters, the figure was above a million.

http://finance.yahoo.com/news/New-ATT-phone-contracts-dive-apf-4279048957.html?x=0&sec=topStories&po s=1&asset=&ccode=&mwp_success=NONJS_POST_SUCCESS#mwpphu-post-form

posted on 20 Apr 2011, 09:26

3. remixfa (Posts: 13902; Member since: 19 Dec 2008)


their prepaid was way higher than their postpaid. that is suprising and sad since they dont push their prepaid products much at all.

posted on 20 Apr 2011, 09:35 4

4. JeffdaBeat (unregistered)


When you go from over 500,000 new subscribers a year ago (in somewhat worse economic times) to only 62,000...that's not too much of a good thing. True, they didn't lose customers, but what a drop. AT&T is also allowing people to put their iPad 2's on their accounts with no contract and I wonder how much of an effect that is having on total subscribers.

Honestly, I want this to happen. Sprint 2007 was a horrible company to work for and be a subscriber to. It took them losing customers and money for them to fix every piece of that company to make it a pretty awesome service with great customer care. I think AT&T needs the same thing. Someone to mess with their pocket book for them to listen to their customers and make substantial changes. Only then will you get better customer service, more competitive pricing, and giving the customer what they demand.

posted on 20 Apr 2011, 10:00

5. snowgator (Posts: 3188; Member since: 19 Jan 2011)


Outstanding post. True statements. AT&T is so large, they have lost sight of the individual customer and only looks at sales numbers as a whole. They make decisions based only on what they think will keep the largest groups happy, as opposed to giving their service reps and techs the freedom to handle each customers problem as they call in. Simple changes in how they treat people and problems can really solve a lot of the criticism of AT&T. This goes for the wireless, internet, TV, and even home phone (what is left of it) divisions.

posted on 20 Apr 2011, 17:18

11. remixfa (Posts: 13902; Member since: 19 Dec 2008)


totally agree.

What will be interesting is when VZW releases their numbers. Im just wondering how many new lines they lost by people wanting iphones and now having a choice between networks. If VZW has a huge bump, i think its safe to say thats at least part of what happened.

posted on 20 Apr 2011, 10:19 1

6. ATTCallCenter (unregistered)


ATT has definitely lost sight on consumer service. Whenever I saw review about how ATT has bad customer service I used to take it somewhat personally and didn't really see how that was possible. I work with a lot of great people who do everything in their power to get what you need done if possible and now I realize where the bad service comes into play. It's the IF POSSIBLE aspect. A lot of the things that people want, some of them I believe are kinda out there and people think they deserve super special treatment like a upgrade every 6 months and year when signing a 2 year contract, but some people just have certain things needed to be done that we can not help with due to the policies ATT inforces on us.

Sales must be down, and that is evident in our week to week numbers now. For the past month they have been halved. I used to push over double our weekly sales quota and mostly everyone would meet that. Now about 5 out of 150 people make it to that same quota I used to double and even triple at some times. Sales are so bad that our cell phone sales department is now required to push ATT wireline products, most importantly the U-TV sales. There is a specific department for wireline products, yet now they enforce another sales quota for us to reach when we get half the calls we used to. Seems like our juggernaut company has it's head so far up it's ass, it will most likely implode *which I would like to see*, and relize the shit that it has been able to pull will no longer suffice.

This will probably happen if the T-Mobile transition takes place. If prices do not drop when the acquisition takes place, you will see atleast 25% of customers jump ship, which would be 20-30 million.

posted on 20 Apr 2011, 10:35

7. networkdood (Posts: 6250; Member since: 31 Mar 2010)


Sales being down had nothing to do with wireless departments pushing wireline products as that was an initiative called 'ONE AT&T', that came about over a year..probably 2 years ago. The number are not bad because the company activated more smartphones than last 1Q, when only they had the iphone. The iphone was actually hurting the companies bottom line and with all of the smartphone choices AT&T can now offer, losing iphone exclusivity actually will help the company in the long run, despite weak net adds, which could also be a product of the economy.
I have found their customer service as good and as bad as any other company, past or present, as it all depends on who you get for person and the mood that they are in.

posted on 20 Apr 2011, 11:20

8. ATTCallCenter (unregistered)


Definitely agree with the end there about who you get and what mood they are in. Normally i'm willing to help everyone, but there are days where I will transfer you to someone else and want nothing to do with helping people. The sales i'm speaking of are not relative to the company in a whole. I do upgrades and feature changes and it could just be that the new area manager is not looking out for our centers best interest but the one where he works at more. We used to be back to back all day, everyday, and now there are more than 10 minutes between calls. Meh, these are mearly just me ranting about my center than ATT in a whole.

As for ATT in a whole, I do have to say is quite shady in everything. In terms of sending out flyers with incorrect information on them, such as our personal plan reviews, which adds all of people minutes. Anytime, Mobile 2 Mobile and Nights and Weekends, telling them to take action in their plan, when in reality, these customers use half their anytime minutes and have thousands of rollover left. As well as advertising unlimited data for smartphones at the cost of $15 per month just so they call in and can get sold something. They either do this purposefully or have some people in marketing that don't even know the prices and features available through the company.

posted on 26 Apr 2011, 17:00

12. attcustomer (unregistered)


When are the updates coming for the Atrix 4G and the Inspire 4G? They said mid April its past that now nothing. at&t dont keep there word or there customers. Im making the switch to Verizon were 4G is on.

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