For the first three months of 2015, it appears that AT&T is doing just fine. Considered by many as the second biggest wireless carrier in the United States, AT&T recently reported that it has added 441,000 new postpaid wireless subscribers during the first quarter of the year. Also during the same period, the carrier also managed to post a customer turnover rate of 1.02 percent, its lowest ever.
Gaining nearly half a million new wireless subscribers and recording its lowest churn rate ever is definitely very impressive, especially when you consider how aggressive its competitors (such as Sprint and T-Mobile) have been in introducing new plans and offers designed to grab away AT&T's existing customer base. And the competition is looking to get even fiercer with new entrant Google announcing its Project Fi wireless service, which happens to partner with Sprint and T-Mobile in delivering its services.
Yesterday, industry leading Verizon also published its quarterly results, but the Big Red fell short of industry forecasts and only managed to add a total of 565,000 new postpaid customers during the first quarter (industry watchers had expected about 620,000). But a closer examination of Verizon's numbers reveal that a considerable chunk of the new additions consist of tablet customers as opposed to smartphone customers. As for AT&T, during the final quarter of last year, it had added 854,000 postpaid customers. In the first quarter of last year, AT&T had added 625,000 customers.
Like Verizon, AT&T must decide whether it should keep its customer base by lowering prices (like what most of its competitors are doing), or just retain its current pricing structure and just hope for the best. As the industry leader, Verizon is not leaning too much on changing its pricing, although it did restructure the prices of some its plans last year, and even made changes to its data allotments without charging extra. AT&T has been more active in participating in the pricing wars, even getting rid of its device subsidy program in the hope of retaining its customers.
As far as earnings go, AT&T posted a profit of $3.2 billion (equivalent to $0.61 per share) for the first quarter of 2015. A year ago, the carrier recorded a profit of $3.65 billion ($0.70 per share). Not counting pension-related charges and other items, AT&T's earnings actually dropped to $0.63 per share from $0.71 per share. The carrier's revenue for the first three months of 2015 is $32.6 billion.
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