AT&T, the second-largest wireless carrier in the United States, saw its revenues decline due to the decrease in handset upgrades and increased pressure on the carrier’s bottom line due to the adoption of unlimited plans. In the latest earnings report from the company, AT&T saw consolidated revenues of $39.4 billion, which is lower than the $40.5 billion that the wireless carrier earned in the same period last year. Of the total revenue, around $17.2 billion are attributed to the wireless division of the company, which is 4.4 percent lower compared to the previous year. Some of the major issues that might have caused the reduction in the revenue of the firm’s wireless division are the record-low equipment upgrades made by subscribers, which might still be affected by the carrier’s discontinuation of plans with subsidized phones, and a reduction in the average revenue per user due to the adoption of unlimited plans. The net profit of the wireless carrier also saw a decrease, with AT&T reporting a net profit of $3.5 billion, which is lower than the $3.8 billion reported in the first quarter of 2016.
During the first quarter of 2017, Verizon and AT&T both lost postpaid customers to smaller national carriers T-Mobile and Sprint. Verizon lost around 289,000 postpaid customers while AT&T lost 191,000 postpaid subscribers. T-Mobile accounted for a big portion of the postpaid customer gains, adding 798,000 postpaid subscribers, while Sprint is expected to report a gain of approximately 100,000 postpaid subscribers. If the prepaid customers are taken into consideration, AT&T still saw an increase in mobile subscribers, with 738,000 postpaid and prepaid customers added to the network. While the decrease in revenue and postpaid subscribers were highlighted by industry analysts, there are still some positive figures posted by the company, as AT&T added the same number of subscribers that it did in Q1 2016, with the carrier now serving 134.2 million customers in the country. The company also saw a record low postpaid churn rate of 0.9 percent and improved profitability with higher operating revenue and EBITDA margins.
Moving forward, AT&T is investing in infrastructure to improve its service and prepare for the upcoming deployment of 5G technologies. AT&T has been involved in the testing and creation of standards for 5G while deploying its “5G Evolution” network in the meantime. The company is also preparing for a possible merger with Time Warner, assuming it manages to clear all related regulatory obstacles.