AT&T is losing more customers on a quarterly basis as pointed out in a new report by Cowen and Company Equity Research. The Dallas-based carrier faces great competition from T-Mobile, which is reportedly the company that subscribers choose upon leaving AT&T.
“When asking postpaid subscribers that have been with their carrier (less than) two years which carrier did they previously have, the top answer for current Sprint, T-Mobile and Verizon respondents was ‘previously AT&T,’” the research group stated in a letter to investors. Such finding is different from the outcomes of past surveys which raked in “more mixed” responses to such questions.
Such results are not a new update to AT&T as the company already noted in its previous reports that it has been losing postpaid phone subscriptions over the last eight quarters. After AT&T lost 268,000 customers during the third quarter of 2016, an analyst from Wells Fargo predicted that the carrier will 220,000 more subscribers in Q4.
Still, with AT&T losing its customers, the company says it has taken on a "more surgical retention strategy of keeping high-value/high-margin subscribers." It has followed Verizon's strategy of increasing fees for activation and upgrade processes; from $20, this will set customers back $25.
According to the company, the continual loss of customers can be attributed to their new retentions system which focuses on lucrative subscribers and enable those subscribed to cheaper plans to transfer to other carriers. This time, AT&T is focusing on high-value subscribers who purchase bundled TV, cable and wireless services, including DirecTV subscribers. In contrast, competitor T-Mobile is focused on selling their current single data plan and raking in multiple lines into a single account.
According to the Cowen and Company report, as AT&T loses its customers, it is not possible for the carrier to return to the U.S. market with a major surprise.
“Considering the format of the question (those that left a carrier over the previous two years), we believe this trend will continue, especially considering AT&T’s pivoted focus to DirecTV (and DirecTV Now) and its broader integrated solution strategy,” the report noted in its conclusions.
