AT&T Not Worried That Competition Is Causing More Customers To Go Elsewhere
Speaking at the UBS Annual Global Media and Communications Conference in New York this morning, AT&T CFO John Stephens revealed that the company’s churn rate — the rate at which current customers leave — will likely be higher this quarter than it was during the same quarter in 2013. During that time period, the churn rate was 1.1%, while the most recently reported quarter saw a rate of .99%.
But at the same time, he claims that AT&T saw a net increase during the last quarter of 2013 of 809,000 total wireless subscribers, including 566,000 postpaid users.
Of course, acquiring new customers is more expensive than retaining current users. And AT&T has had to offer promotions — like throwing in extra data for free — to bring in those subscribers. Stephens says the cost of these offers will cut into the Death Star’s profit margins, but not so much as to cause any long-term harm to the company.
He’s also confident that the smaller competitors won’t be able to keep up with AT&T in the long run, saying that none of the Sprint or T-Mobile promotions “give us significant pause.”
“The phones have got to work. The service has got to be great,” he explained. “You’ve got to have a great network.”
It also helps to have a customer base that is double the size of those competitors and can absorb the occasional battle on price.
And while there isn’t currently much to worry about from Sprint — its history of poor coverage and even worse customer service will likely limit the number of people interested in its half-off (sorta) promotion — the latest wireless survey results from our colleagues at Consumer Reports found that T-Mobile was the only one of the four major national carriers to get a “good” rating in the “value” category, with each of the three others rating “very poor.”
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