AT&T has been losing its postpaid customers in the United States over the last eight quarters, and analysts reveal that it is losing more customers when compared with rival network operators.
This decrease suggests that AT&T subscribers are shifting to other carriers such as Sprint, Verizon and T-Mobile.
According to Cowen and Company Equity Research, AT&T is reportedly "donating" its subscribers to rival carriers. The analysts also shared that it quizzed postpaid users who were with a carrier for less than two years who they switched from to the present network operator, and learnt that it was AT&T.
This answer was quite frequent and popular than it had been on previous occasions. In older surveys, the user response tended to be mixed and included Sprint, Verizon and T-Mobile as well.
What Has Changed?
The scenario suggests that lately, AT&T has been focusing on its high-margin customers. This may have caused the carrier to lose out on a lot of its other postpaid subscribers.
Moreover, in Q3 2016, the carrier lost 268,000 subscribers. Most of these subscribers were the low-ARPU users. Interestingly, AT&T generated its EBITDA margin in this quarter, which was 50.1 percent.
Other than concentrating on high-margin customers, AT&T has also been working toward expanding its offers.
The carrier has also expanded its product offerings and retails a gamut of devices such as tablets, smartwatches and even data connections for vehicles, which is attributed to its multiple automaker partners.
As a result, on one hand AT&T is losing its postpaid subscribers but on the other it is gaining customers in other areas.
The research firm estimates that AT&T will not be focusing too much on wireless in the coming quarters as the carrier has been looking to expand its media business.
AT&T has recently purchased DIRECTV and launched its OTT service i.e. DIRECTV NOW. The carrier also intends raising DIRECT NOW's $35 plan to $60.
Raising Upgrade And Activation Fee
If you are an AT&T subscriber, then you should prepare yourself to pay a bit more for smartphone upgrades and activation. The carrier will reportedly be increasing the fee to $25 from $20 from Jan. 20.
The reason for AT&T subscribers switching to other carriers could be attributed to the frequent price hikes implemented by the network operator. With AT&T lagging behind in the wireless space, competitors like Verizon, T-Mobile, and Sprint could experience more growth.
Photo: Mike Mozart | Flickr