360° Coverage : AT&T had strong 1Q on wireless installment plans

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AT&T had strong 1Q on wireless installment plans

Apr 22 2014, 5:24pm CDT | by

NEW YORK (AP) — AT&T's wireless business had a strong first quarter as the company added more than 1 million subscribers and benefited from an installment plan that permits...

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18 weeks ago

AT&T had strong 1Q on wireless installment plans

Apr 22 2014, 5:24pm CDT | by

NEW YORK (AP) — AT&T's wireless business had a strong first quarter as the company added more than 1 million subscribers and benefited from an installment plan that permits frequent phone upgrades.

Although customers in the installment plan, called Next, aren't locked into traditional two-year service contracts, they pay the entire cost of phones in installments. As a result, AT&T doesn't have to pay hundreds of dollars per customer in subsidies. In return, customers can get a new phone as often as every year instead of every other year.

The company's first-quarter net income was $3.7 billion, or 70 cents per share, compared with $3.7 billion, or 67 cents, a year earlier, when AT&T had more shares outstanding. Adjusting for one-time items, including costs related to its March acquisition of Leap Wireless, income was 71 cents per share, compared with 64 cents in the same period last year. Analysts expected 70 cents.

Revenue grew 4 percent to $32.5 billion, better than the $32.4 billion analysts expected, according to FactSet.

Nonetheless, AT&T's stock fell 2.2 percent to $35.50 in after-hours trading after the release of results.

AT&T added 1,062,000 wireless subscribers in the quarter. That includes 625,000 smartphones and tablets in "post-paid" plans. These are the high-value customers on contracts or long-term installment plans. Wireless service revenue grew 2 percent to $15.4 billion. Total wireless revenue, including phones and tablets sales, grew 7 percent to $17.9 billion.

The U.S. wireless industry is undergoing a transformation as wireless carriers try to wean customers off subsidies. Subsidies had helped attract customers as the wireless industry grew, but most Americans now have cellphones.

Among new customers of post-paid smartphones and those upgrading to new devices, more than 40 percent, or about 2.9 million, signed up for the subsidy-free Next plan. That was up from 15 percent in the last three months of 2013.

Besides letting people upgrade more often once they are on Next, AT&T waived the usual wait until existing contracts are up. People were allowed to switch right away. About 1.1 million of the new Next customers came through that promotion.

AT&T also has been pushing customers into more expensive plans that offer larger amounts of data — by reducing prices at the high end.

"Customers really like the new mobility value proposition and are choosing to move off device subsidies to simpler pricing while at the same time, they are continuing to move to smartphones with larger data plans," AT&T CEO Randall Stephenson said in a statement.

In the landline business, revenue fell 0.4 percent to $14.6 billion. But its newer U-verse phone, TV and Internet service saw growth. AT&T had 634,000 additional high-speed Internet subscribers and 201,000 new TV subscribers.

AT&T raised its outlook for the year to reflect the Leap purchase. It expects revenue growth of at least 4 percent, compared with the previous guidance of 2 percent to 3 percent. It kept expectations for adjusted earnings per share the same: a percentage gain in the mid-single digit.

 
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2 days ago

Khazanah throws MAS RM6b lifeline

Aug 29 2014 5:01pm CDT | Source: Business Times Singapore

August 30, 2014 1:15 AMKHAZANAH Nasional will inject RM6 billion (SS$2.4 billion) over three years to resuscitate loss-making Malaysia Airlines (MAS) under a recovery plan that includes even an Act of Parliament. Other key moves are migrating its operations, assets and liabilities to a new company (NewCo) and slashing the workforce of ...
Source: Business Times Singapore   Full article at: Business Times Singapore
 

 
Update
1

3 days ago

MAS posts loss of RM307m for Q2

Aug 28 2014 5:00pm CDT | Source: Business Times Singapore

August 29, 2014 1:13 AMMALAYSIA Airlines (MAS) registered a loss of RM307 million (S$122 million) for the second quarter to end-June, but warned of worse to come in the second half when the "full financial impact of the double tragedies ...
Source: Business Times Singapore   Full article at: Business Times Singapore
 

 

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