Smartphones boost AT&T ARPU and reduce churn
But its ability to poach other carriers' customers with iPhone is dwindling
Published: 23 July, 2010
READ MORE: Financial | US | AT&T | iPhone
AT&T's smartphone activities continued to drive its quarterly results, as it boasted an impressive 3.4% leap in postpaid ARPU and its lowest ever contract churn. This reflects rising data usage, and the cellco said its re-introduction of tiered pricing had not hurt this trend. It was also helped by its move to broaden its smartphone offering beyond its iPhone flagship.
While AT&T's churn was low, it was also harder to poach subscribers from other operators, reflecting the increased loyalty that high profile smartphone data deals bring to all carriers. AT&T added 1.6m net new customers in the second quarter, a Q2 record, though this was fewer than some analysts had hoped for, given the introduction of the iPhone 4 and iPad during the period, both on AT&T exclusives.
AT&T reported 3.2m iPhone activations in the three months but 73% of these were from within the cellco's existing base, which now totals 90.1m, rather than being lured from rival operators.
The most positive elements of the Q2 results were the rise in wireless revenue, which jumped 10.3% year-on-year, and monthly wireless postpaid ARPU, which grew 3.4% to $62.63. Wireless data revenues increased by $936m to $4.4bn, and the number of data plans increased 24% in the past year. Integrated 3G devices now account for 29.7m connections, about one-third of AT&T's overall base.
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