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AT&T today announced its 4Q 2013 earnings, revealing the company added 1.2 million postpaid smartphones to its network (both upgrades and new subscribers) and gained 809,000 new subscribers, with 566,000 being postpaid customers with a contract. It is unclear how many of AT&T's new customers were choosing iPhones, however, as AT&T, like Verizon, no longer reports quarterly iPhone activations or sales.
Smartphones made up 93 percent of total phone sales and 77 percent of the postpaid phone base. The carrier also added 440,000 new tablets during the quarter.
Compared to the year-ago quarter, AT&T gained 300,000 fewer new subscribers, but saw a record low contract churn rate of 1.11 percent and an overall churn rate of 1.43 percent. A company's churn rate is the percentage of customers that leave the carrier during the quarter. It appears that AT&T is managing to retain most of its subscriber base at this point, but during the next quarter, T-Mobile's efforts to lure AT&T customers may become more apparent.
AT&T Next, AT&T's smartphone and tablet upgrade program, has drawn more than 1.5 million customers since it was first launched in July of 2013.
Earlier in January, AT&T competitor Verizon announced smartphone activations of 8.8 million along with 1.7 million new subscribers. Verizon continues to have a bigger postpaid customer base than AT&T at 96.2 million wireless customers compared to AT&T's 72.6 million.
Overall, AT&T announced a profit of $6.9 billion on $33.2 billion in revenue.
Top Rated Comments
Yet Apple made 15 billion in profit, and we're still paying through the nose for their products.
All companies are in it for profit.
Apple doesn't overcharge people is a matter of opinion. It all depends on what to perceive of value. Just like with ATT services. For areas where ATT provides better service than other carriers - it's of great value to be a customer of theirs. Again subjective.
As for ATT - no one forces anyone to sign a contract. And that contract doesn't have hidden fees. And if they try and change your contract before it's up - you have the ability to walk away. You are not "coerced" into using their services. Do you know what the word "coerce" means?
Criticizing ATT for making a nice profit and praising Apple for making theirs is nothing more than cheerleading because you happen to like one company over another. To the rest of the world it appears hypocritical.
Why do we see conspiracies around every corner? Implying kickbacks is kind of low. How about it's just business. The marketing hype they got from reporting iPhone sales was good for a time but the market is more mature and they no longer feel the need to highlight their iPhone sales. There's no more cachet to saying "We sold X number of iPhones." Everybody sells iPhones: Walmart, Target, Costco, MVNO's, etc. Since we're just tossing theories like horseshoes... here's one: Pretty soon the telcos are going to get away from subsidies. AT&T already said the model is unsustainable. Take a guess which phone has benefited the most from the subsidy model? Why mention that phone in your earnings reports when the way you've had the most success selling them is going away in the future?
Like you, I have no facts. I think my theory is just as viable.
http://finance.yahoo.com/news/t-posts-4q-profit-higher-212634374.html (http://finance.yahoo.com/news/t-posts-4q-profit-higher-212634374.html)
The nation's biggest telecommunications company said Tuesday that it earned $6.9 billion, or $1.31 per share, in the October-December period. That's up from a loss of $3.8 billion, or 68 cents per share, in the same period a year earlier.
The latest quarter's results included a pension-related gain of $7.6 billion, tax expenses and other items. Excluding these items, adjusted earnings were 53 cents per share in the latest quarter, beating analysts' expectations by 2 cents.
In other words, if you exclude the one-time gains, profits were more like $2.8 billion. That's a profit margin of about 8.5%.
How does that compare to other domestic telecom providers?
http://biz.yahoo.com/p/844qpmd.html (http://biz.yahoo.com/p/844qpmd.html)
The average net profit margin is 7.7%. For the entire technology sector, it's 7.23%.
For another comparison, you'll find Apple, Inc. in the Consumer Goods > Electronic Equipment sector:
http://biz.yahoo.com/p/314conameu.html (http://biz.yahoo.com/p/314conameu.html)
Their last quarterly report was $13.1 billion profit on $57.6 billion in revenue, a 22.7% profit margin.
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AT&T isn't coercing you or anyone else. You are free to go to another provider or go without a cell phone altogether, as long as you pay back any contract termination fee to cover the remaining cost of the $600 phone they sold you for $200.
The only organization coercing you into paying them money is your local, state, or federal government. Even if you have only a single choice for power, landline telephone, cable TV, etc., it's due to franchise agreements with your local government.
Apple doesn't overcharge people or create hidden fees. They tell you, upfront, what the cost of their product is. And you know you're getting great service and support, at no cost (for the first year). They made 15 billion in profit, and every cent was earned without coercion.
All companies are in it for profit - but it's only some of them that become misleading and dishonest to achieve their goals.