AT&T reports loss of cellphone subscribers

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Thursday, April 25, 2013

NEW YORK—AT&T revenue fell short of Wall Street’s first quarter expectations, losing ground in the cellphone market to Verizon Wireless and sending its shares down about two percent, according to a report from Reuters.

AT&T’s net revenue of $31.36 billion for the quarter fell short of the $31.74 billion that analysts had, on average, anticipated. This was in part due to AT&T’s mobile subscriber growth falling short of expectations, along with that growth being fueled primarily by tablet device users, who pay lower monthly fees, the report noted.

“Since most U.S. consumers already have smartphones, the No. 2 U.S. mobile service provider [AT&T] and its rivals are rushing to put wireless connections in everything from tablet computers and consumer electronics to medical devices and home security systems,” the report said.

However, the report said, “while customers with devices like tablets are less costly to attract than smartphone users, which require hefty subsidies, tablet customers bring in less revenue, raising analyst concerns about AT&T's prospects for top-line growth.”

An analyst quoted in the report said it takes more connected devices to compensate for losing a phone subscriber. However, Susan Johnson, senior vice president for investor relations, said other devices would increasingly be important, according to the report.

AT&T maintained its target for 2013 overall revenue growth of two percent. The company added 296,000 subscribers in the quarter, which surpassed Wall Street expectations of just 195,000, Reuters reported, adding that this included a net addition of 365,000 subscribers using tablet devices.