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AT&T slows subscriber churn; profits up eight percent

updated 11:46 am EDT, Tue July 24, 2012

Strong margins boost Q2 performance

AT&T has released its second-quarter financial disclosures, showing a gain in profits despite nearly flat overall revenue. The jump in net income, from $3.6 billion to $3.9 billion, was mostly attributed to the company's wireless division. Subscriber churn was down to just one percent, while average revenue per user (ARPU) benefited from increased spending on wireless data.

Apple's iPhone release schedule is also said to be a contributing factor, as some customers wait for the sixth-generation model to arrive. AT&T noted that smartphone upgrades reached a new low, helping to boost margins by reducing subsidization costs. The company last year modified its upgrade rules to eliminate 12-month eligibility and force customers to wait nearly two years before receiving the lowest price on new hardware.

Although AT&T showed an increase in post-paid subscriber loyalty, its 320,000 new customers still lag behind competitor Verizon's 888,000 additions in the same quarter. Half of AT&T's new customers also signed onto tablet contracts, rather than the pricier smartphone plans.

AT&T's wireline revenue took a slight hit, dropping by 0.8 percent, though the company still managed to see a slight gain in net income from the segment. Verizon showed similar performance, as both companies lose wired telephone customers but add Internet and television accounts.



By Electronista Staff
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  1. And.reg

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    Greetings. I am unable to delete my posts, and apparently you moderators are on some kind of a strike.

    Therefore, I have removed the content of the original post by hand.

    I am asking for this post to be deleted, since I don't seem to have the option to do that myself.

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