More than 2 million customers have signed up for the unlimited data plan AT&T (NYSE: T) launched less than two months ago, CFO John Stephens said this morning.
"We had 500,000 in the first two weeks of the program, and that was really without any advertising," Stephens told attendees at an investor conference today. "We've done a little bit of advertising and the number's over 2 million now."
The $100-a-month plan offers unlimited data to users who are also subscribers of DirecTV, which AT&T acquired last year. Additional lines are $40 a month, and a fourth line costs nothing.
The plan is part of AT&T's larger strategy to offer discounted bundles to users who subscribe to multiple offerings, Stephens explained.
"When you think about a customer who's buying our wireless services from us, buying video services from us, and then oftentimes buying broadband services from us, they could be paying us three or four hundred dollars a month," he said. "We're going to make sure we treat them with the appropriate respect and are giving them a great deal."
Uptake of the unlimited plan "significantly leans toward existing video and wireless customers" rather than users who switch from other carriers, Stephens continued.
Stephens also said AT&T's customers aren't upgrading their handsets as frequently as they did before the carrier introduced its Next program in the summer of 2013. Next allows subscribers to upgrade smartphones and tablets every 12 months if they agree to add a monthly installment plan to their bill.
"What we're seeing on an overall basis is customers holding their phones longer," he said, echoing an industry-wide trend as operators have moved away from handset subsidies and two-year contracts. "Prior to Next we had 90,000 to 100,000 customers a quarter bringing their own devices and saying, 'Can you hook up this device? I already own it.' For the most of last year we saw about 350,000 to 400,000 a quarter (doing that), showing that customers are taking that device and reusing it. In the fourth quarter that number was up to 700,000.
"So for us that number doesn't generate any equipment revenue," Stephens added, "but it doesn't generate any equipment expense."
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