AT&T sees fewer new customers in 3Q
NEW YORK (AP) — The flow of customers into AT&T's wireless stores slowed further in the latest quarter, putting the company far behind rival Verizon Wireless.
AT&T Inc. on Wednesday said it added a net 151,000 new customers on contract-based plans from July through September, the lowest number for that period since at least 2003.
The Dallas-based company is blaming short supplies of the iPhone 5, which launched a week before the end of the quarter. But that didn't hold back Verizon Wireless, which last week reported adding 10 times as many contract-signing customers as AT&T did.
AT&T said the shortage of iPhones meant that most of them went to people who were already AT&T customers. Only 18 percent of the 4.7 million iPhones it activated in the quarter went to new subscribers, the lowest number yet.
AT&T suggested that it suffered in comparison to Verizon because it launched its new data-sharing plans later in the quarter. Verizon launched "Share Everything" just before the start of the quarter and said it prompted people to add lots of extra devices to their plans. AT&T waited until August to introduce "Mobile Share" and was less aggressive about it. At Verizon, "Share Everything" was the only choice available to new customers, while AT&T kept its old plans alongside the new one.
"For years, Verizon and AT&T have performed a nearly impossible feat; both companies have consistently and significantly outperformed an industry of which they already represented the overwhelming share," said Sanford Bernstein analyst Craig Moffett. "Simple math says that can't be sustained forever ... Verizon Wireless is still outperforming industry metrics. But AT&T isn't anymore."
"We're not reliant on connecting more people," said Ralph De La Vega, the head of AT&T's wireless division, on a conference call with analysts. The company's strategy now is to expand services, getting existing customers to spend more, for instance by hooking up their homes to AT&T's security and automation services, he said.
At the end of the quarter, AT&T was sending out bills for 77.3 million devices on its network, while Verizon served 95.6 million. Both have millions more devices on their networks through wholesale arrangements, but these pay much less.
AT&T's wireline business, which makes up nearly half of revenue, continued to shrink slowly, as people cancel their landlines and move from phone-line broadband to cable modems.
AT&T's quarterly results were largely flat with a year ago. Net income was $3.64 billion, or 63 cents per share, nearly unchanged from $3.62 billion, or 61 cents per share, a year earlier.
For the latest quarter, analysts expected earnings of 60 cents per share.
Revenue was also essentially flat from last year, at $31.46 billion. Analysts expected $31.57 billion.
Comparisons to last year were affected by the sale of AT&T's phone book business in May. The unit was profitable but shrinking, so AT&T sold a controlling stake to a private equity firm for $950 million. When subtracting the phone book business from last year's results, AT&T's earnings rose about 2 percent in the latest quarter, as customers kept shifting from regular phones to smartphones with more expensive service plans. Revenue grew nearly 3 percent.
AT&T shares fell 15 cents to $34.85 in late morning trading.
AT&T Inc. on Wednesday said it added a net 151,000 new customers on contract-based plans from July through September, the lowest number for that period since at least 2003.
The Dallas-based company is blaming short supplies of the iPhone 5, which launched a week before the end of the quarter. But that didn't hold back Verizon Wireless, which last week reported adding 10 times as many contract-signing customers as AT&T did.
AT&T said the shortage of iPhones meant that most of them went to people who were already AT&T customers. Only 18 percent of the 4.7 million iPhones it activated in the quarter went to new subscribers, the lowest number yet.
AT&T suggested that it suffered in comparison to Verizon because it launched its new data-sharing plans later in the quarter. Verizon launched "Share Everything" just before the start of the quarter and said it prompted people to add lots of extra devices to their plans. AT&T waited until August to introduce "Mobile Share" and was less aggressive about it. At Verizon, "Share Everything" was the only choice available to new customers, while AT&T kept its old plans alongside the new one.
"For years, Verizon and AT&T have performed a nearly impossible feat; both companies have consistently and significantly outperformed an industry of which they already represented the overwhelming share," said Sanford Bernstein analyst Craig Moffett. "Simple math says that can't be sustained forever ... Verizon Wireless is still outperforming industry metrics. But AT&T isn't anymore."
"We're not reliant on connecting more people," said Ralph De La Vega, the head of AT&T's wireless division, on a conference call with analysts. The company's strategy now is to expand services, getting existing customers to spend more, for instance by hooking up their homes to AT&T's security and automation services, he said.
At the end of the quarter, AT&T was sending out bills for 77.3 million devices on its network, while Verizon served 95.6 million. Both have millions more devices on their networks through wholesale arrangements, but these pay much less.
AT&T's wireline business, which makes up nearly half of revenue, continued to shrink slowly, as people cancel their landlines and move from phone-line broadband to cable modems.
AT&T's quarterly results were largely flat with a year ago. Net income was $3.64 billion, or 63 cents per share, nearly unchanged from $3.62 billion, or 61 cents per share, a year earlier.
For the latest quarter, analysts expected earnings of 60 cents per share.
Revenue was also essentially flat from last year, at $31.46 billion. Analysts expected $31.57 billion.
Comparisons to last year were affected by the sale of AT&T's phone book business in May. The unit was profitable but shrinking, so AT&T sold a controlling stake to a private equity firm for $950 million. When subtracting the phone book business from last year's results, AT&T's earnings rose about 2 percent in the latest quarter, as customers kept shifting from regular phones to smartphones with more expensive service plans. Revenue grew nearly 3 percent.
AT&T shares fell 15 cents to $34.85 in late morning trading.
AT&T is kind of crappy service anyway
I'd just like to know how many people are without cell phones these days. I've seen 8y/o with their own phones. Can't imagine there are that many potential customers left... and the ones that are probably have terrible credit and no money to pay a deposit for new service anyway.
I'd like to know who the genious was that allowed Verizon to sell its fios service to frontier and to then bundle service with comcast? If that isn't an anti competitive agreement I dont know what is.
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Frontier is the worst company ever your options have really be reduced in Oregon for high speed internet. Comcast keeps jacking the rates up because they have a non compete agreement with verizon which is why verizon services are sold in comcast stores now. Since Frontier cant get anything right your only option is comcast.
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So while home phones may be getting eliminated these companies are just driving up the cost of your internet connection to offset the lost revenue. So much for competition driving prices down. Would be nice if our government figured this stuff out and realized its not in the consumers best interest and started breaking these agreements up.
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We are the US yet we have some of the highest prices for internet and the slowest speeds.
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Landline phones are overcharged. I have just basic phone service and I pay almost $30 a month. No call waiting, no voicemail no caller-ID, just a dial tone.
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For $30 a month I can get a cell phone with all of those features.
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At&t's wireless was buried by the iPhone's success. Once the iPone went to other customers and Android phones were available, people left the overloaded system in droves.
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The combination makes At&t's services rather undesirable and thus the shrinking of their subscriber numbers.
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 @Repoman That came with the "Omnibus Telecom Act" of 1998 or around then. Congress decided to jack up fees on things while talking about marginal rate tax cuts. The fees can be changed at the discretion of the carrier, bypassing regulated costs.