AT&T boasts of Q3 wireless growth without promotions

ATT store
AT&T released its third-quarter results. (Mike Mozart/Flickr)

AT&T executives crowed about the performance of the wireless carrier’s business in the third quarter—results company executives said were not aided by any particular promotions during the period.

“We’re the least promotional of all the carriers and yet provided some good net growth,” AT&T’s John Donovan, chief executive of AT&T’s mobility business, stated on the company’s earnings call with investors, pointing to AT&T’s relatively quiet activities on the overall advertising front as well as in the operator’s tranquil service pricing and promotions during the period. “And so we feel very good where we are right now.”

Indeed, AT&T said that its wireless service revenues rose 2.3% to $14 billion, and that it notched a total of 3.4 million wireless net adds, figures driven mainly by connected devices and prepaid customers. AT&T said it recorded 550,000 phone net adds during the third quarter, 69,000 postpaid phone net adds and 481,000 prepaid phone net adds. Those results were generally in line with or better than most Wall Street expectations.

“The tide has definitely turned in wireless,” added John Stephens, the company’s CFO.

A number of AT&T executives, including CEO Randall Stephenson, pointed to AT&T’s Cricket-branded prepaid business as a particularly bright spot; Stephenson described the business as “red hot.”

And Donovan argued that AT&T’s prepaid customers will help raise AT&T’s overall finances. He explained that 60% of AT&T’s Cricket customers share the same behaviors as the company’s postpaid customers.

Analysts generally agreed on the sunny aspect of AT&T’s wireless business. “As expected wireless was the bright spot,” wrote the analysts at Wells Fargo in a note to investors following the release of AT&T’s results. “The growth in service revenue and the positive addition of postpay phone adds offers evidence they continue to hold their own in a competitive market.”

“Wireless healthy results on improving fundamentals,” proclaimed the analysts at Wall Street research firm Oppenheimer in a note to investors on AT&T’s results. “Reported wireless revenues were up 5.1%, with service revenues up 2.3%. T continued Y/Y improvement in both postpaid and prepaid phone adds. Postpaid phone net adds of 69K were a 219K improvement over last year and postpaid phone churn was slightly higher but stable at 0.93%. Trends in wireless are improving.”

Here are some other key topics coming out of AT&T’s third-quarter earnings announcement:

FirstNet: AT&T executives said that the company is six months ahead of its FirstNet network buildout plan. And Donovan said that Hurricane Michael highlighted AT&T’s opportunities in the public-safety space: "Our network operated at 90% and usually better of normal performance in the areas affected by Hurricane Michael,” Donovan said, noting that one unnamed public-safety official said, “When everything else was down, FirstNet was working.”

“The first responder community is a great sales opportunity for us,” Donovan noted. “We believe there’s a lot of opportunity waiting for us.”

AT&T also recently announced that more than 3,600 public safety agencies across the country have joined FirstNet.

5G: Donovan said AT&T would launch mobile 5G services in the next few weeks. Click here for that story.

DirecTV Now and video: AT&T’s video business, including its Watch TV and DirecTV Now streaming offerings, stumbled slightly in the quarter. Further, company officials said AT&T is working to refine its approach to the streaming video market, noting that streaming video users behave in some cases much like prepaid wireless users do, in that they shop around for the best deals on a regular basis. Click here for that story.