AT&T saw success with the plan to offer customers an out from their contract, which stated they would pay up to $200 of the customers cost to break the contract and walk away over to AT&T. This plan to poach subscribers came first from T-mobile who gladly offered to pay up to $350 for AT&T contracts(abd other wireless carriers)if customers were to switch, in addition to buying their old phone so they could purchase a new one from the Bellevue based wireless carrier. AT&T didn’t let T-mobile do all the poaching, as evident by their growth numbers since they began offering to eat the cost of customers leaving their old providers which was earlier this year. In addition to seeing a subscriber growth base go up adding a total 1 million new customers, AT&T also saw profit while adding new subscribers at the same time which is usually not the case, at least not in such high values, which came in at about $3.7 billion. Since AT&T primarily deals with contracts and subsidized devices, they usually have to sacrifice some profitability to gain those users, but this time around they were able to gain on both fronts.
Although AT&T has seen an increase in growth with profits being higher than expected by Analysts, T-Mobile still stands to post the most earnings growth out of the four major carriers. This likely won’t stop AT&T though as they will just continue what their doing and improve in areas that need improving. AT&T is working on competing in more than just the wireless sector though, having just announced that they plan to roll out their GigaPower fiber optic gigabit internet service in 21 new locations, competing directly with Google and their Fiber service which has already rolled out to a couple cities.
Of the new wireless customers that AT&T gained this quarter, 625,00 are subscribers who have chosen to sign up on a contracted plan, which means more than half of their customer growth comes from long-term contracts. Although T-Mobile has been growing its own subscriber base, AT&T isn’t letting it phase them it seems and they still remain the country’s number two wireless carrier behind Verizon.