T-Mobile rode the wave to the top once again in the fourth quarter while AT&T continued its postpaid phone losing streak, according to a Monday earnings preview from Wells Fargo.
Senior Analyst Jennifer Fritzsche said T-Mobile’s previously announced subscriber numbers – 1.2 million total postpaid net adds, 933,000 postpaid phone net adds, and 541,000 prepaid net adds – “will likely once again lead the industry” in the fourth quarter. The Un-carrier is expected to rake in around $7.2 billion in service revenue and $9.8 billion in total revenue, she said, and noted postpaid APRU is expected to be up .5 percent year over year.
But Fritzsche’s forecast is less rosy for AT&T, which she said is expected to post around 220,000 postpaid net losses and a slight decrease in service revenue thanks to “competitive pressure on lower-end postpaid customers.” This despite AT&T’s launch and proclaimed success of its DirecTV Now product, she said.
“T did not engage in significant wireless-specific promotions in Q4 similar to the other Big 4 carriers,” Fritzsche wrote. “T would also feel a residual churn impact as the 2G network is shuttered and basic phone subscribers churn away.”
However, Fritzsche said AT&T’s Cricket prepaid brand likely did well in the period, with an expected 300,000 net additions.
Though Fritzsche said it lost share to T-Mobile and Sprint, she observed Verizon is forecast to see “solid smartphone net additions offset from continued basic phone losses and tablet churn” for a total of 57,000 postpaid phone net additions. Service revenue of $16.3 billion is expected to dip once again in the fourth quarter, but less so than in the third quarter, Fritzsche reported, while churn will move the opposite direction, rising both sequentially and year over year to 1.07 percent.
As previously chronicled here, Fritzsche noted Wells Fargo’s expectations for Sprint in the fourth quarter are “muted” thanks to fierce competition in the run up to the Christmas holiday. Fritzsche said Sprint is expected to post 350,000 postpaid net additions, 250,000 prepaid net loses, and service revenue of $5.9 billion. The bright spot for Sprint, she said, will be a reduction in churn due to network improvements.