New York: AT&T on Wednesday posted lower net income for the latest quarter due to cheaper cellphone plans it introduced as a response to aggressive pricing from smaller competitor T-Mobile US.
AT&T said half of its wireless subscribers have already moved to “Mobile Share Value” plans, introduced in February. It’s also adding subscribers to its Next plans, which carry lower monthly fees because customers pay full price for their phones.
On a conference call with analysts, executives defended the new Next and Mobile Share Value plans, saying they boosted the number of new customers to the highest level in five years.
“We are very pleased with what we’re seeing from our wireless repositioning, and we’re confident in our strategy,” said John Stephens, AT&T’s chief financial officer.
AT&T shares fell 60 cents, or 1.7 per cent, to $35.28 (Dh129.48) in extended trading, after the release of the results.
Average estimate
The Dallas company said it earned $3.55 billion, or 68 cents per share. That was down from $3.82 billion, or 71 cents per share, in the same quarter last year.
Excluding some one-time items, AT&T’s earnings were 62 cents per share in the latest quarter, a penny shy of the average estimate of analyst polled by FactSet.
Revenue was $32.58 billion, up 1.6 per cent from a year ago. Analysts polled by FactSet were expecting $32.24 billion in revenue.
AT&T, the second-largest cellphone company, is duelling with No. 4 T-Mobile US, which has shaken up the industry with innovative pricing plans. T-Mobile has been raking in new subscribers in the last year, but it hasn’t yet revealed its results for the second quarter. It reports next week.
