Strong subscriber growth powers AT&T's Q2 2014 earnings
AT&T had a great quarter that was driven by the addition of 2 million new users to its wireless and wireline businesses. Combined with the rest of its operations, the carrier reported that revenues were up 1.6 percent, meaning that it took in $32.6 billion. The carrier noted a higher $1 billion operating expense compared to a year ago at $27 billion giving it an operating income of $5.6 billion.
AT&T's financial situation was strongly helped by the addition of more than 1 million users to its post-paid accounts and a low 0.86 percent churn rate.
AT&T said it has added 1.6 million smartphones from upgrades and new customers. The carrier notes that 92 percent of phones sold on postpaid accounts were made up of smartphones so feature phones are on the steady decline. Additionally LTE smartphones made up two-thirds of AT&T's smartphone base.
In terms of pricing, it looks like Mobile Share is on the rise, tripling year over year and doubling in 2014.
A few more highlights from the earnings report:
- About 44 percent of AT&T's postpaid customers are on a no-contract Mobile Share Value Plan.
- Half of all smartphones sold, according to AT&T, were to customers on an AT&T Next plan.
- Additionally, 366,000 postpaid tablets were added to an AT&T plan.
- All this led to an increase of 3.7 percent of wireless revenues from a year ago.
- The wireline business is still growing thanks to the U-Verse broadband and TV business with a revenue growth of 30 percent compared to a year earlier.
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By Daryl Baxter