Light Reading
Once its acquisition of Leap Wireless closes in Q1, AT&T is planning to make a big push selling smartphones to the prepaid market.

AT&T Plans a Prepaid Cricket Attack

Sarah Reedy
1/28/2014
50%
50%

Once AT&T's acquisition of Leap Wireless closes in the first quarter, the carrier is planning to be aggressive in the prepaid market and ramp up its contract-free smartphone base.

Speaking on the company's fourth-quarter earnings call, AT&T Inc. (NYSE: T) CEO Randall Stephenson devoted a lot of time to talking up the carrier's prepaid plans, a first for it as it's usually focused on the more lucrative postpaid market.

The carrier actually lost 32,000 prepaid subscribers in the fourth quarter, which it attributed to tablet subscribers, but Stephenson assured analysts that things will be different once its acquisition of Leap Wireless closes in the first quarter. The CEO said his research into the small, contract-free carrier has shown off the strength of its customer-facing brand, Cricket Communications, so much so that AT&T will shut down its own prepaid brand, Aio Wireless, when the deal closes. (See AT&T to Acquire Leap Wireless for $1.19B.)

With more than 93% of its postpaid customer base now using smartphones, AT&T also plans to look to the prepaid market for future smartphone growth. The carrier did manage to add more than 230,000 prepaid smartphones to its network in the fourth quarter, giving it a base of more than 2 million prepaid smartphones. ARPU for these customers is more than 70% higher than the non-smartphone prepaid base, Stephenson said. (See AT&T's Device Mix Shifts Away From Postpaid.)

"You'll see us get most competitive moving into the value space with the Leap acquisition and using the Cricket brand," Stephenson said when questioned about AT&T's response to the competitive environment created by T-Mobile US Inc. "We'll be very assertive and aggressive on pushing smartphones on prepaid," he said.

The AT&T boss didn't offer much detail about what he had in store for Cricket, mainly repeating that putting the Cricket brand on top of the AT&T network has the potential to shake up the prepaid industry. He did, however, note that there is more wiggle room for lower prices using the Cricket brand, because it wouldn't affect the core of AT&T.

As for its core network, the carrier is also ahead on its LTE network deployment plans, currently covering 280 million people with plans to reach 300 million with the 4G network by this summer. (See AT&T Adds 12 LTE Cities as 4G Goes Global.)

Overall in the fourth quarter, AT&T added 809,000 subscribers, 300,000 fewer than it did last year. But, it also grew its wireless revenues 4.5% to $18.4 billion. The carrier sold 7.9 million smartphones in the quarter, down from 10.2 million a year ago. Its postpaid churn was at 1.11%, its lowest ever for the fourth quarter.

— Sarah Reedy, Senior Editor, Light Reading

(2)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View
Liz Greenberg
50%
50%
Liz Greenberg,
User Rank: Light Sabre
3/14/2014 | 6:30:23 PM
Re: AT&T v T-Mobile
I know that the "uncarrier" has already affected both AT&T and Verizon price plans.  It will be interesting to see what happens with Cricket pricing...especially since AT&T will push for more smartphones and higher ARPUs.
SarahReedy
50%
50%
SarahReedy,
User Rank: Blogger
1/28/2014 | 7:51:50 PM
AT&T v T-Mobile
T-Mobile is clearly having an affect on AT&T with its prepaid customer losses, but Stephenson didn't acknowledge the uncarrier or its CEO in the earnings call. I guess Legere's main beef is with de la Vega, but I think it's good Stephenson didn't acknowledge it either. Didn't have too -- the results were good enough he didn't have to.
Educational Resources
sponsor supplied content
Educational Resources Archive
Flash Poll
From The Founder
It's clear to me that the communications industry is divided into two types of people, and only one is living in the real world.
LRTV Huawei Video Resource Center
Building a Secure Telefonica Network With Huawei's High-End Firewall

11|24|14   |   4:37   |   (0) comments


Andrew Davies, IP architect of the Telefonica, a leading digital communications company, discusses the Huawei security gateway solution and putting the solution into the testbed.
LRTV Huawei Video Resource Center
Huawei Partners with Spirent to Verify CE12816's 10GE Port & TRILL Networking Capabilities

11|24|14   |   2:50   |   (0) comments


Spirent Communications is the world's leading supplier for telecom testing appliances and solutions. Spirent has been in a close partnership with Huawei for a long time.
LRTV Huawei Video Resource Center
Saudi Airlines & Its ICT Transformation

11|24|14   |   2:07   |   (0) comments


In this video, Saudi Airlines discusses its network problems and how Huawei's Agile Network is its all-in-one solution.
LRTV Huawei Video Resource Center
Huawei's Agile Switch Benefiting Saudi Arabia's Yamamah Hospital

11|24|14   |   2:40   |   (0) comments


Saudi Arabia's Yamamah Hospital speaks about how Huawei's Agile Switch has improved the medical service's network infrastructure.
LRTV Huawei Video Resource Center
FanPlay & Huawei Build a Wireless Agile Smart Stadium

11|24|14   |   2:13   |   (0) comments


FanPlay is a cloud-based white label service, which is effectively a football fan engagement platform underpinned by mobile payment technology.
LRTV Huawei Video Resource Center
Building an Agile Stadium

11|24|14   |   3:54   |   (0) comments


Stadiums may be thousands of tons of concrete and steel, but they now need to be agile. Being at the stadium may not be as alluring as it once was. Sports franchises and stadium operators discuss how to get fans back.
LRTV Huawei Video Resource Center
Huawei Helps ChinaCache Tackle Challenges in the Internet Industry

11|24|14   |   3:09   |   (0) comments


ChinaCache is China's largest content distribution network supplier. Huawei's CE12800 has provided ChinaCache with very strong support in its establishment of an infrastructure network.
LRTV Huawei Video Resource Center
Cefinity on Managed Security Services & Next-Generation Firewall

11|24|14   |   7:05   |   (0) comments


Cefinity is a cloud management service provider in Southeast Asia. Ivan Zhang, CEO of the company, discusses the implementation of security service management in the cloud era.
LRTV Huawei Video Resource Center
Huawei's Agile Gateway in the Eyes of Cefinity

11|24|14   |   2:11   |   (0) comments


Cefinity is a managed service provider for enterprise networks. The company currently uses Huawei's AR series routers for the most complete range of functions. CEO Ivan Zhang speaks about the advantages of the AR series routers.
LRTV Huawei Video Resource Center
CTO of Bus-Online Talks About Huawei's Agile Gateway

11|24|14   |   2:53   |   (0) comments


Bus-Online covers around 100 million users everyday. In addition to providing mobile TV, and advertising services to the public, Bus-Online has also entered the field of mobile Internet.
LRTV Huawei Video Resource Center
Amsterdam ArenA as an Agile Campus

11|24|14   |   3:31   |   (0) comments


The Amsterdam ArenA, home of the Ajax soccer team, can be a crowded space. ArenA has partnered with Huawei to work on bringing ample bandwidth to 53,000 people at the same time.
LRTV Huawei Video Resource Center
Building a Gigabit Wireless Network

11|24|14   |   3:15   |   (0) comments


3W is dedicated to customer-centric services such as catering, incubator and PR. To do this requires a solid IT structure. In this video, 3W discusses how Huawei has helped to achieve its goals.
Upcoming Live Events
December 2, 2014, New York City
December 3, 2014, New York City
December 8-10, 2014, Reykjavik, Iceland
February 12, 2015, Atlanta, GA
April 14, 2015, New York City, NY
May 6, 2015, McCormick Convention Center, Chicago, IL
May 13-14, 2015, The Westin Peachtree, Atlanta, GA
June 9-10, 2015, Chicago, IL
Infographics
Irish Telecom outlines the rise of VoIP technology, including its adoption within businesses and their perception of its quality.
Hot Topics
Bell Labs Chief Slams 'Toy' Networks
Robert Clark, 11/19/2014
$38.3M: Ain't That a Kik in the SMS
Sarah Reedy, Senior Editor, 11/20/2014
Do You Have a 2020 Vision?
Dennis Mendyk, Vice President of Research, Heavy Reading, 11/21/2014
The New Wave of IP + Optical Integration
Ray Le Maistre, Editor-in-chief, 11/21/2014
Last Chapter (11) for Aereo
Mari Silbey, Independent Technology Editor, 11/21/2014
Like Us on Facebook
Twitter Feed