AT&T unexpectedly loses postpaid subscribers in first quarter

Posted April 26, 2017

The customer erosion still weighed on sales, with the company posting revenue of $39.4 billion, trailing the $40.6 billion seen by analysts. But just as important, the strategic moves we've made over the last few months to expand our wireless capacity and fortify our 5G leadership will be felt for years to come.

AT&T recently announced the FirstNet deal that gives the operator access to 20 megahertz of low-band spectrum. AT&T has five business days to match or exceed the bidder's offer.

For 2017, the AT&T said it is no longer providing consolidated revenue guidance "due to the unpredictability of wireless handset sales".

AT&T's revenue shortfall is in part owed to losing 66,000 postpaid mobile phone subscribers during the quarter.

The carrier posted 2.1 million overall wireless net adds in the US, however, driven primarily by prepaid and connected devices, and other 633,000 net wireless adds in Mexico.

AT&T unexpectedly loses postpaid subscribers in first quarter
AT&T unexpectedly loses postpaid subscribers in first quarter

AT&T's revenues dropped to $39.4 billion from $40.5 billion in the year-ago quarter, primarily due to record-low equipment sales in wireless.

AT&T and Verizon have also been buying up assets that they need for a next-generation, or 5G network, with faster downloads and applications that would enable self-driving cars. Operating margins were a strong 30.1%. In the same period from past year, AT&T reported $0.72 in EPS and $40.53 in revenue. Wireless service revenues were up.9 percent, reflecting smartphone and tablet gains, and continued migration from consumer plans. Compared with results for the first quarter of 2016, operating expenses were $32.5 billion versus $33.4 billion; operating income was $6.9 billion versus $7.1 billion; and operating income margin was 17.4% versus 17.6%. These services represent an annualized revenue stream of almost $12 billion.

AT&T is fighting to both keep and add customers and increase revenue amid a price war with smaller rivals T-Mobile US Inc. and Sprint Corp. Total business broadband had a loss of 25,000 subscribers in the quarter.

The company noted it had 2.7 million wireless net adds for the quarter.