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Gadgets AT&T is More Profitable But Falls Short on Expectations, Customer Additions
Jason Mick (Blog) - January 24, 2013 7:05 PM

5 comment(s) - last by xti.. on Jan 25 at 9:20 PM

AT&T sells more iPhones than Verizon, but still trails in subscribers, LTE, and customer satisfaction

AT&T, Inc. (T), unlike its rival Verizon Wireless, saw profits climb for Q4 2012. However, that still wasn't enough to reach analyst expectations.

Analysts predicted a profit of $0.4545 USD/share on revenue of $32.2B USD. AT&T delivered a profit of $0.44 USD/share (after one-time charges) on revenue of $32.6B USD. AT&T did reward shareholders with $4.4B USD in stock buybacks for the year, taking its total for the year to $12.8B USD.

AT&T sold 10.2 million smartphones for the quarter, which it claims is a record for any American phone carrier. IPhone upgrades accounted for the majority of those sales; in total AT&T sold 8.6 million iPhones, ahead of Verizon's 6.2 million iPhones sold. AT&T added 780,000 total new post-paid subscribers, less than the 2.1 million Verizon tacked on.

If Verizon is winning the war of customer additions, AT&T is winning on the profitability front. However, both of America's top two carriers fell slightly short of analyst hopes amid various issues, including damage from Hurricane Sandy.

Ma Bell continues to grow its U-Verse cable service, which is slowly creeping across the country.

_{AT&T fell short of analyst expectations. [Image Source: Reuters/Shannon Stapleton]}

CEO Randall Stephenson cheered the profitable quarter, remarking, "We had an excellent 2012. Looking ahead, our key growth platforms — mobile data, U-verse and strategic business services — all have good momentum with a lot of headroom. We're off to a strong start executing Project VIP, our plan to expand our high-growth platforms to millions more customers, and our 4G LTE network deployment is ahead of schedule, delivering outstanding performance."

AT&T currently trails Verizon in 4G LTE data support. It is in the midst of a $14B USD spending push to try to fortify its 4G offerings, with the goal of covering 250 million Americans with LTE by the end of 2013. By contrast, Verizon currently covers 276 million Americans with LTE.

Customer service is another soar spot for AT&T. Over the last three years The Consumer Reports has consistently ranked AT&T as the worst carrier in terms of customer service. AT&T will attempt to break that streak this year.

Sources: AT&T, FT [analyst estimates]

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RE: Customer Service has been very good for me anyways

By idiot77 on 1/25/2013 7:00:21 AM , Rating: 2

Not the experience I've had with them. Terrible connections in buildings, dropped calls nonstop, horrible customer service.

In fact, I called them to tell them that if they couldn't at least some part way on the monthly bill I was going to Verizon who was going to give me 22% the base rate and they more or less told me to go stick it.

Been with VZW ever since... and I have dropped calls only the most peripheral of locations. And I actually get to use my LTE.

In fact, I can't believe how bad ATT is and yet they're somehow still profitable. And it's not just me, they have the lowest customer service ratings of any carrier.

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RE: Customer Service has been very good for me anyways

By degobah77 on 1/25/13, Rating: 0

RE: Customer Service has been very good for me anyways

By othercents on 1/25/2013 8:46:39 AM , Rating: 2

I never had a problem with AT&T either, however I did leave them this year, but that was due to my wife's requirement for unlimited international calling which is available through T-Mobile. AT&T said that they could match that with a limited number of international minutes, but overall with WiFi calling, unlimited data, and unlimited international calling, T-Mobile was just a better deal.

I believe most of the satisfaction issues comes from the 3G network that became overloaded. 4G and 4G LTE have been much better for AT&T with less dropped calls. However this isn't a good comparison with Verizon and AT&T has always had a lower satisfaction rating.

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