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AT&T Postpaid Phone Losses to hit 1.6M, says Analysts

December 23, 2015 - Written By Alexander Maxham

AT&T has been struggling the last few quarters when it comes to postpaid phone additions, or shall we say subtractions. AT&T has been able to find other areas to add customers, or in the least additional connections. For instance, their partnership with GM for OnStar nets them around 1 million connected cars each quarter. Analysts are now predicting that AT&T’s postpaid phone losses are going to get even wider and hit 1.6 million, and this mostly due to them attempting to bundle services and not having a ton of success. Earlier this year, AT&T bought DirecTV and recently started bundling DirecTV along with their wireless service, and it appears to not have worked so well.

DirecTV has 15 million customers that do not use AT&T for wireless service. And there’s 3 million that are in a U-Verse area, but choose not to use AT&T for their ISP. Walter Piecyk from BTIG, stated that customers aren’t likely to switch carriers for a few dollars in savings, with churn rates at all time lows right now (that basically means many people are sticking with their current carrier, vs leaving for another). Piecyk wrote in a research note that “we are hesitant to factor in that integrated service opportunity into our models until we can see more tangible evidence of execution and given the initial reliance on price discounts rather than service integration.” Due to that, Piecyk is expecting that postpaid phone losses will go from 1.4 million in 2015, to 1.6 million in 2016 and 1.7 million in 2017. This is going to provide a challenge for AT&T to find ways to grow revenue and profits in their wireless sector.

Strategy Analytics recently put a new report, noting that increasing interest among carriers distributing video and other content. Verizon already has their Go90 service, which they are expecting to add more content and make more cash off of in the near future. AT&T is rumored to be making their own mobile video service, while T-Mobile is looking to bring in new customers with their Binge On service, even if YouTube doesn’t like the service. Sprint on the other hand, currently has no plans for mobile video.