News
U.S. telcos add 614,000 and 127,000 retail postpaid customers respectively; AT&T still losing video subscribers.
Verizon on Thursday reported stronger retail postpaid net additions in the second quarter than AT&T, which also continued to lose video subscribers.
Just like the preceding quarter, the results from the two biggest U.S. telcos highlights how mobile competition has intensified, with increases in their respective customer bases not translating into topline growth.
The picture was gloomier in Q1 though, when Verizon lost 307,000 retail postpaid connections, and AT&T lost 348,000 postpaid phone customers.
AT&T and Verizon are pinning their hopes for future growth on media, with AT&T hoping to acquire content giant Time Warner, boosting its DirecTV business, and Verizon ramping up its online content and advertising activities with its new Oath subsidiary, which houses AOL and Yahoo.
Here is how the two U.S. telco giants compared in Q2:
Mobile customers
Verizon added 633,000 retail mobile subscribers in the quarter, of which 614,000 were higher-paying postpaid customers and the remaining 19,000 were prepaid. It ended June with 114.54 million connections, 109.09 million of which were postpaid and 5.45 million were prepaid. A year earlier, Verizon had 113.15 million retail subscribers; 107.78 million postpaid and 5.37 million prepaid. Churn was flat year-on-year at 0.94%.
AT&T’s mobile net additions came in at a whopping 2.28 million in Q2, but that figure also includes connected devices, such as tablets and connected cars among others. Postpaid net additions were a more modest 127,000, while prepaid net additions came in at 267,000. The company ended the quarter with 136.5 million mobile connections, of which 77.4 million were postpaid and 14.19 million were prepaid. That compares to 131.81 million in Q2 2016, which included 77.3 million postpaid customers and 12.63 million prepaid customers. Churn inched down to 1.28% from 1.35%.
Fixed/video customers
Verizon’s Fios Internet service netted 49,000 customers in the second quarter, giving it 5.74 million in total, compared to 5.50 million a year ago. Its video base fell by 15,000, leaving it with 4.67 million, down from 4.64 million in Q2 2016.
AT&T’s Entertainment Group recorded broadband net additions of just 8,000, as new high-speed Internet connections totalling 112,000 were offset by the loss of 104,000 DSL connections. AT&T also lost 199,000 video customers, as the addition of 152,000 DirecTV Now customers was more than wiped out by the loss of 156,000 satellite customers and 195,000 U-verse TV customers. AT&T ended June with 14.3 million broadband customers, up slightly from 14.18 million a year earlier, and 25.17 million video customers, down from 25.30 million at the end of June 2016.
Financial performance
Verizon’s second quarter revenue was broadly flat at $30.55 billion, compared to $30.53 billion a year ago, as declining service revenue was offset by an uptick in wireless equipment revenue. However, operating expenses fell to $22.32 billion from $25.98 billion, boosting operating income to $8.23 billion compared to $4.55 billion in Q2 2016. Net income jumped to $4.48 billion from $831 million a year ago, when Verizon’s performance was impacted by striking wireline workers.
Revenue at AT&T inched down 1.7% year-on-year to $39.84 billion. Like Verizon though, operating expenses fell to $32.51 billion from $33.96 billion, resulting in operating income growth of 11.6% to $7.32 billion. Net income grew 14.2% to $4.01 billion.
