AT&T Starting to feel the Pressure from Other Carriers Promotions in Q4 2014

Last night, AT&T announced their Q4 earnings. That's the quarter that ended on December 31st. They saw a 3.7% decrease in revenue, a 10.7% decrease in ARPU (Average Revenue Per User), and their EBITDA margin dropped to 27.9% from 31.8% from a year before that. So while AT&T put up big numbers, they were lower than in Q4 2013. And typically Q4 is the biggest quarter as you have all the holidays in that quarter, as well as Black Friday.

So is AT&T starting to feel the pressure from smaller carriers like T-Mobile and Sprint - who are heavily invested in a pricing war as well as Prepaid - well maybe a little bit. While revenue and ARPU can't keep going up forever (Apple had this issue a couple years ago when their earnings weren't as sky high as usual). They are still bringing in a ton of money, a ton of customers, and making hand over fist.

AT&T CFO John Stephens, spoke on the call yesterday,

"As expected, postpaid churn was up in the quarter," he said on the Q4 earnings call. "The fourth quarter traditionally sees increased levels of churn for all carriers. And when you add in the intense competitive activity in the quarter, it's no surprise to see churn at these levels. But even with all this noise in the market, postpaid churn levels were comparable to two years ago, the last time a fully refreshed iPhone hit the market. And this was the first time that all major carriers were able to sell that phone during the busy fourth quarter."

AT&T hasn't been as stubborn as Verizon when it comes to competing with T-Mobile and Sprint. But they haven't been as competitive as they could be. They did introduce data rollover, shortly after T-Mobile announced Data Stash. Which I think would work better on AT&T and Verizon anyways, as they use data buckets (Verizon already shot down that idea though). It'll be interesting to see what AT&T does in the next quarter or two to combat the decreases in revenue, ARPU and also the rising churn rate.

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Alexander Maxham

Head Editor
Alex has written for Androidheadlines since 2012 as Editor of the site and traveled the World to many of the biggest Smartphone and Technology events. Alex has a background in Technology and IT and Deep Passion for Everything Android and Google. His specialties lay in Smartphones of all budgets, Accessories, Home Automation and more. Contact him at [email protected]