News by Andrew Kameka on Tuesday January 28, 2014.
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AT&T has released its earnings report for the fourth quarter of 2013. The final three months of the year were good to AT&T, but not as good as it has been in years past. On the positive side, AT&T saw its lowest ever fourth-quarter postpaid churn at only 1.1 percent. Churn, which measures the rate of subscribers that cancel their subscriptions within a given period, shows that AT&T had a healthy quarter, but there were signs of pressure from other carriers. Net customer additions were 566,000, down from the 780,000 added during the same period in 2012. Despite high smartphone sales across the industry, AT&T did not attract as many new customers at a time when T-Mobile saw an increase of 869,000 net postpaid subscribers.
AT&T says that its introduction of AT&T Next helped reduce churn. More than 1 million customers have signed up for Next, the program that can lower monthly prices if customers pay full price for a device. The program was originally seen as a response to the pressures of T-Mobile Jump, but AT&T claims that Next is just part of the solution. About 20 percent of sales in the fourth quarter were to Next customers.
Chairman and CEO Randall Stephenson told investors:
"While I'm confident that Next has had a positive impact on churn, I would stress to you that the award winning customer service that our retail stores give and our network performance [reduced customers leaving].
"What is probably most interesting to me as we look at what has played out in 2013 and carried into the first month of 2014 is the idea that our customers are demonstrating an interest, and desire even, to put more money into the device in exchange for lower monthly pricing. "
Regarding that network performance, AT&T says that it has been moving quickly to enhance its network in anticipation of increased demands from customers. The 4G LTE build is nearly complete, and more network advancements from improved calling and data rates are expected later this year. Here are some highlights the carrier mentioned in its earnings release:
- 1.2 million new smartphones sold
- 93 percent of postpaid phone sales are smartphones
- 77 percent of all customers now on smartphones, up from 70 percent
- 93 of 125 cities rank AT&T as 1st or tied for 1st in network performance (according to RootMetrics)/p> source: AT&T
Andrew is MobileBurn.com's managing editor. He is based in Miami, Florida.