AT&T Postpaid Subscriber Growth Slow In Third Quarter
By Adam Dickter / Mobile Tech Today. Updated October 24, 2012.
Hardly anyone is sitting around these days debating whether or not to get a cell phone. As of June, there were 321.7 million wireless subscriber connections in this nation of 314 million people, up from 243 million five years ago, according to CTIA-The International Association for the Wireless Telecommunications Industry.
That makes it harder than ever for wireless carriers to keep up the momentum of adding new subscribers, relying on churn, or people switching carriers, kids getting old enough for their first device and those last holdouts who are convinced it's not a fad.
The problem is keenly felt by the nation's second-biggest carrier, AT&T Mobility, numbers for the third quarter suggest.
Dallas-based AT&T on Wednesday boasted that overall wireless revenue was up 6.6 percent, and average revenue per subscriber was the largest in six quarters, up 2.4 percent to $65.20. The total net increase for wireless subscribers, including pre- and post-paid plans and data-only plans for modems, was 678,000, with gains in all categories.
But AT&T noted that net additions in the most valuable customers, postpaid subscribers locked into contracts, amounted to just 151,000, for a total of 44.5 million postpaid customers. The announcement came with this disclaimer:
"Postpaid results were impacted by iPhone 5 inventory constraints which resulted in the vast majority of third-quarter iPhone sales going to existing customers, where there was considerable pent-up demand."
A majority of AT&T's 6.1 million smartphones sold to new and existing customers in the quarter, 4.7 million, were iPhones. The long-awaited iPhone 5, with its larger screen and 4G long-term evolution high-speed data capability, was released by Apple in the last week of the quarter.
Reuters noted that analysts expected about 358,000 net additions for postpaid for the quarter, and that the 151,000 by far pales in comparison to the 1.5 million net new subscribers gained by the top U.S. carrier, Verizon Wireless in the same quarter.
So why isn't the carrier picking up more newbies?
"AT&T's problems are hard to parse," Charles King, principal analyst of Pund-IT, told us. "On one hand the company appears to be working hard to address issues with its high-speed networks, but past failures -- including poor preparation and support during the time the company was the only carrier with the iPhone -- may have permanently tarred the company for many users."
"In any case, being outgrown 10 times by its biggest rival isn't something AT&T can believably lay on Apple," King said.
In a video on AT&T's Web site, Ralph de la Vega, president and CEO of AT&T Mobility, said the growth in revenue per user was fueled by an 18 percent increase in data revenue.
"Mobile data has become a $26 billion revenue stream for us," he said.
He added that smartphone users make up 64 percent of the subscriber base and 80 percent of postpaid sales in the quarter, and that 40 percent of smartphone users are now using 4G capable devices.
He also noted that only AT&T iPhone users have the ability to surf and make voice calls at the same time.
AT&T in the past has suffered from low user satisfaction because of connection problems, but de la Vega boasted that the company now has 0.75 percent dropped-call rate that contributed to its lowest churn rate ever for a third quarter.