AT&T Mobility reported solid first quarter customer and revenue growth, with the former bolstered by strong adoption of tablet devices.
The carrier said it added 291,000 net customer additions for the quarter, which was down 60% from the 726,000 customers the carrier added last year. The carrier ended the first quarter with just over 107 million wireless connections on its network.
AT&T Mobility reported that postpaid growth increased by 296,000 customers during the first quarter, which was up more than 58% compared with the first quarter of 2012. The carrier noted that result included 365,000 postpaid tablet net additions during the quarter, signifying that other device segments posted a net loss for the first three months of the year. Analysts pegged that number at 69,000 postpaid handset losses, despite AT&T Mobility reporting it sold a first-quarter record 6 million smartphones during the quarter and that smartphones accounted for 81% of postpaid device sales, which would include tablets, and 88% of postpaid device sales, sans smartphones.
Helping to boost postpaid growth was a dip in customer churn from 1.1% during the first quarter of 2012 to 1.04% this year, while total churn dropped from 1.47% in 2012 to 1.38% this year.
Prepaid connections dipped during the quarter, as AT&T Mobility said it lost 184,000 direct prepaid customers and 252,000 connections were lost through resellers. The carrier blamed the drop on slowing sales of its GoPhone line and a drop in sales of prepaid tablet services. The reseller losses were attributed to partners clearing out “low or no usage accounts.”
AT&T Mobility is reportedly on the verge of launching its All In One Wireless prepaid offering to battle that increasingly competitive space. The All In One Wireless platform is expected to provide unlimited talk, messaging and data for basic phones for $50 per month, with a smartphone option providing 2 gigabytes of data for $60 per month. Reports indicated that the offering is likely to run across the carrier’s HSPA+ network with the possibility of refurbished iPhones being offered and a bring-your-own-device option.
AT&T Mobility did continue to see strong growth in its connected devices space, also known as machine-to-machine, which posted an 87% year-over-year increase to 431,000 net additions during the quarter. The carrier reported that at the end of the quarter it served nearly 14.7 million connected devices on its network.
AT&T Mobility’s customer numbers fell short of rival Verizon Wireless, which reported last week that it had added 720,000 direct retail customers during the first quarter, including 677,000 postpaid net additions.
Average revenue per user for postpaid customers increased just under 1% year-over-year, blunted by lower ARPU tablet sales.
The overall growth in customers along with the slight increase in ARPU contributed to a 3.4% increase in total wireless revenues to $16.7 billion for the quarter. Revenues from data services increased 21% to $5.1 billion, offsetting a 3.8% drop in “voice, text and other services,” which came in at $9.9 billion for the quarter.
Wireless income increased 4% year-over-year to just over $4.6 billion. AT&T Mobility noted that wireless margins improved slightly year-over-year from 27.8% to 28%, while earnings before interest, taxes, depreciation and amortization service margins grew from 42.3% in 2012 to 43.2% this year.
Wireless services accounted for 53% of parent company AT&T’s total revenues for the quarter compared with 50.6% during the first quarter of 2012. Overall, AT&T said revenues dropped 1.5% year-over-year to $31.4 billion during the first quarter. However, savings across a number of interest-related metrics helped squeak out a 3.2% increase in net income, which hit $3.7 billion for the quarter.
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