AT&T reports first quarter earnings; results impacted by Mobile Share Value Plans

AT&T reports first quarter earnings; results impacted by Mobile Share Value Plans
The nation's second largest carrier, AT&T, has reported its earnings for the first quarter of 2015. The company reported a record-low first quarter churn rate of 1.02%, an improvement from the 1.07% reported last year. AT&T added a net 1.2 million new wireless subscribers during the three-month period. 441,000 of those were of the postpaid variety, and 684,000 were connected cars. 98,000 new pre-paid subscribers were added, thanks to strong growth at pre-paid subsidiary Cricket.

From January through March, AT&T had a net addition of 500,000 branded postpaid and 700,000 pre-paid smartphone accounts. Postpaid net tablet additions amounted to 711,000. Wireless margins were lower during the quarter because of the growth in Mobile Share Value Plans and the growth at Cricket. First quarter wireless margins were 24.5% vs. the 28.3% reported last year.

Speaking of Mobile Share Value Plans, AT&T now has 19.4 million such accounts, a 70% increase year-over-year. Each account covers an average of three handsets. At the end of Q1, half of Mobile Share Value Plans were contracted for 10GB of data or more. In addition, as the quarter ended 87% of AT&T's postpaid accounts were using a usage-based data-plan. As a result, Average Revenue Per User (ARPU) declined for postpaid accounts by 9.6% year-over-year. Equipment sales rose 36.1% to $3.4 billion as fewer customers purchased phones using a subsidized plan. Service sales declined 3.7% to $14.8 billion.

Overall, AT&T's wireless revenues rose 1.8% over the first quarter of 2014 to $18.2 billion. Operating income for the wireless division was $4.4 billion, down 12% year-over-year. The carrier blames the success of its one-year old Mobile Share Value plans for the drop in income.

source: AT&T via Crackberry

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9 Comments

1. ajac09

Posts: 1482; Member since: Sep 30, 2009

aka Tmobile not hurting them.

2. arch_angel

Posts: 1651; Member since: Feb 20, 2015

Att has great service and more than fair family plans, so its no wonder T-Mobile isn't hurting them.

4. cncrim

Posts: 1588; Member since: Aug 15, 2011

sarcasm

5. arch_angel

Posts: 1651; Member since: Feb 20, 2015

what?

7. Salazzi

Posts: 537; Member since: Feb 17, 2014

We will see come the T's earning report.

3. youlookfoolish

Posts: 193; Member since: Dec 14, 2012

T-Mobile is going to brag about customer adds. The reality that most will be prepaid and they won't make anywhere near the revenue the big boys pulled in will be sweet.

6. Salazzi

Posts: 537; Member since: Feb 17, 2014

If that were the case.. how is that a good thing? From a consumer standpoint..

8. corporateJP

Posts: 2458; Member since: Nov 28, 2009

It's not...and he looks foolish...

9. Augustine

Posts: 1043; Member since: Sep 28, 2013

More than half customers were connected cars out of the factory (perhaps most through GM's OnStar), whose owners only minimally contract and, if they already are ATT customers, are not new subscribers. IOW, effectively, much less than 1M new subscribers. Pretty lame, methinks.

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