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AT&T Earns A Q4 Profit, But Feels The Heat From T-Mobile

January 28, 2014 - Written By Patrick Northcraft

If we rewind the clock back to Q4 2012, shareholders of AT&T were not happy people.  The company had lost $3.9 billion, costing shareholders 68 cents per share.  However, in Q4 2013, AT&T did a far superior job, turning out a $6.9 billion profit from their $33.2 billion revenue.  While this is good news for the stockholders in AT&T, there is a looming elephant in the room that they need to watch out for.  T-Mobile has been hammering the telecommunication giant over the last year.  AT&T did not take this laying down, however, and they have issued a plan to pay T-Mobile customers $200 in credit to switch over, along with up to $250 more if they trade in their phones.  In response, the UNCarrier said that they would pay up to $350 in early termination fees to cover the costs of an AT&T customer switching over, along with up to $300 for a traded in smartphone if used in conjunction with the ETF deal.  The feud between the two carriers has gotten to be rather entertaining, considering that the very outgoing T-Mobile CEO John Legere likes to get involved himself.  He even crashed an AT&T party that was hosted at the Consumer Electronics Show, supposedly to hear Macklemore and Ryan Lewis perform, and was thrown out by AT&T security.  To say the feud is building is an understatement.

AT&T has announced that they have added 1.2 million smartphone users under contract.  An important detail to keep in mind is that this number includes both upgrades and new subscribers, instead of just a net number.  AT&T has also revealed that they have added a net 566,000 wireless customers on a contract, along side 440,000 net new tablet customers.  After considering the losses that they have taken with phones, tablets, connected devices, prepaid devices, and reseller business, there is a net 809,000 wireless subscriber increase.  Even thought, based on Q4 reports, the company is doing rather well when it comes to smartphone sales, they appear to be losing customers in the low-end, especially those who  do not have a smartphone, and are looking at T-Mobile’s aggressive offers.  AT&T’s early upgrade program, called ‘Next’, has brought in over a million sales. taking up about 15% of all postpaid smartphones additions and upgrades.  How do you feel about AT&T’s report?  Is it satisfactory, or should they be watching out for T-Mobile?  Let us know in the comments below!