Tablets Drive 3Q Net Adds at AT&T

“Connected devices” (tablets, principally) drove net mobile additions at AT&T during the third quarter of 2013.

AT&T added nearly one million net subscribers, including 63,000 mobile postpaid accounts. AT&T also added 192,000 prepaid accounts.

However, connected device net adds were 719,000, or 73 percent of net additions.

One might draw several conclusions from these figures. First, the sharply-reduced rate of net additions confirms that the mobile phone market is saturated. In past years, the U.S. mobile industry added 300,000 to 800,000 net new customers every quarter, most of which were added by just two carriers, Verizon Wireless and AT&T Wireless. 


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So, for AT&T to add just 63,000 postpaid customers is a huge reduction.

Also, prepaid now accounts for an order of magnitude more net new adds than postpaid, showing where growth now is occurring, at least for AT&T.

This growth will continue to come from tablet connections, even if the average revenue per device is going to be far lower than for phones.

The third quarter results also showed continued movement towards usage-based plans. About 72 percent, or 36.4 million, of all AT&T postpaid smart phone subscribers are on usage-based data plans, up from 64 percent, or 28.5 million, a year ago.

The newer trend marks a shift to the new “Mobile Share” plans, which also likely accounts for the surge of tablet connections. More than 16 million connections, or more than 22 percent of postpaid subscribers, have moved to Mobile Share plans.

The number of Mobile Share accounts reached 5.3 million in the third quarter, with an average of about three devices per account.

Take rates on the higher-data plans continue to be strong, with 30 percent of Mobile Share accounts choosing 10 gigabyte or higher plans. About 15 percent of Mobile Share subscribers came from unlimited plans.

In the third quarter, postpaid churn was down slightly to 1.07 percent compared to 1.08 percent in the year-ago quarter. Total churn was 1.31 percent versus 1.34 percent in the year-ago quarter, and 1.36 percent in the second quarter of 2013.

About 90 percent of postpaid subscribers are on FamilyTalk, Mobile Share or business plans. Churn levels for these subscribers are significantly lower than other postpaid subscribers, which is one reason service providers such as AT&T like them.