AT&T Mobility (NYSE: T) is expecting a strong third quarter in terms of churn and overall results, according to a senior AT&T executive. "We're not the victim in the quarter," AT&T's John Stankey said.
Stankey, AT&T's chief strategy officer, made the remark in an appearance at the Bank of America Merrill Lynch Media, Communications and Entertainment Conference. "We're still seeing great churn levels," he noted, which he said is an indication that AT&T's wireless network is holding up despite increasing demand. He said AT&T is maintaining its guidance and that he saw nothing that troubled him in terms of the trajectory of AT&T's performance.
"We think we'll do just fine in this refresh on the Apple device," he said, referring to Apple's (NASDAQ: AAPL) new iPhone 6 and 6 Plus.
In the second quarter AT&T said its postpaid churn was a record-low 0.86 percent, compared to 1.02 percent in the year-ago quarter and 1.07 percent in the first quarter of 2014.
Stankey's comments are notable in light of other pronouncements from top industry executives in recent days indicating that AT&T's competitors have had strong third-quarter performances so far. Verizon Communications (NYSE: VZ) CEO Lowell McAdam said last week the carrier's wireless postpaid retail net additions had grown 40 percent so far during the third quarter when compared with last year's period, when the company posted 927,000 additions.
T-Mobile US (NYSE:TMUS) added 760,000 branded net customers in the month of August alone, which was its best month ever in terms of postpaid net adds, according to CEO John Legere. The figures included 552,000 postpaid net additions and 208,000 prepaid net adds. To put those numbers in context, T-Mobile added 672,000 branded net customers in the full third quarter of 2013, and had 1.01 million branded net subscriber additions for the entire second quarter of 2014.
Sprint (NYSE: S) is expected to report a rough third quarter, and could wind up being the "victim" Stankey was talking about. The company lost 1.61 million net retail customers in the first six months of 2014 but has recently refreshed its pricing for individual customers to $60 a month for a plan with unlimited voice, texting and data, $20 cheaper than the comparable T-Mobile plan. Sprint has also introduced shared data plans for families with data buckets that are twice the size of those offered by Verizon and AT&T Mobility at the same prices.
Sprint CEO Marcelo Claure said last week at an investor conference that Sprint is going to be "crazy" about winning customers back. "Our network is better," he said. "Our value is better." Since the price change went into effect Claure said Sprint "had a couple of days that we have more customers coming to us than leaving us. That's a big deal. That hasn't happened since… [SoftBank CEO] Masa [Son] become a largest shareholder of Sprint."
Stankey said "we're in a moment right where's a little bit of a supply and demand dynamic going on. Perhaps referring to Sprint and T-Mobile, he noted, "some networks are more empty than others and pricing is probably adjusting as a result of that."
The AT&T executive said that he thinks wireless market is "incredibly competitive," something smaller competitive carriers would likely disagree with.
"There will be new innovations, new vectors of attack and new opportunities that pop up," he said. "It's a tangible existence every day as to why I think regulators should to take a step back and understand that there's really nothing to be done here. There's no need to be talking about structures of net neutrality." The FCC is currently deciding whether to apply new net neutrality rules to wireless networks.
Referring obliquely to rules for next year's planned incentive auction of 600 MHz broadcast TV spectrum, in which up to 30 MHz of spectrum in some markets will be reserved for smaller carriers, he said there is no need to be "handicapping different entities in acquiring certain assets that are necessary to run a business."
Stankey said that although there is a lot of competitive "noise" in the market, "our job new is to shift the attack vectors. It's to take it to the next generation. It's not just price--but price, service, coverage, and what else people can do with their devices; how else they bundle them with other services; how they can get more utility out of them to watch more entertainment."
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