AT&T not chasing 'switchers segment,' raises outlook for 2015

AT&T's (NYSE: T) Ralph de la Vega said the carrier is not focused on trying to get customers to switch to AT&T from rival carriers. Instead, he said the carrier is working to retain its high-value wireless customers.

Separately, AT&T raised its overall guidance for this year and the coming years due to what the carrier said was an improved business outlook following the close of its acquisition of satellite TV company DirecTV.

During the carrier's analyst day today, de la Vega, CEO of the carrier's Mobile & Business Solutions Group, said the carrier has increased the number of its postpaid wireless customers during the past year by around 3 million. He said that the carrier has also increased the number of its prepaid subscribers by around 4 million during the same period.

"We have not pursued the switcher segment, which is characterized by aggressive promotions, low prices and high churn," de la Vega said. "Instead, we have focused on retaining our high value customers."

De la Vega specifically pointed to AT&T's successes in prepaid, noting that the results from the carrier's Cricket and GoPhone brands "have simply been amazing." He said that during the first half of this year, AT&T netted a total of 429,000 prepaid customers--which he said was more than the rest of the industry combined. And he said prepaid customers are delivering increased revenues: He said Cricket's smartphone customers generate average revenues per user of around $42 per month.

De la Vega also said AT&T has made progress in cutting costs in its wireless business through efficiently building out its network and making its services easier to use. For evidence, he noted that AT&T's customer care calls have dropped by more than 1 million per month during the past year.

As part of its analyst day, AT&T also updated its guidance for the rest of the year, and the next few years. AT&T raised its free cash flow expectations from around $12 billion for the full year 2015 to around $13 billion or better. And the carrier said its revenues this year will grow at a double-digit rate, faster than the company previously forecast.

The company also increased its 2015 capital expense spending forecast for 2015 from $18 billion to $21 billion, largely to account for DirecTV's expected spending.

Through 2018, AT&T said it expects to grow revenues at a rate equal to or better than the United States' GDP. The company also said it expects its earnings per share would be in the mid-single digits or better.

For more:
- see this AT&T release

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