& cplSiteName &

AT&T Plans a Prepaid Cricket Attack

Sarah Thomas

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        ADD A COMMENT
Liz Greenberg
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.
Sarah Thomas
Sarah Thomas,
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.
Featured Video
From The Founder
Ngena's global 'network of networks' solves a problem that the telecom vendors promised us would never exist. That doesn't mean its new service isn't a really good idea.
Flash Poll
Upcoming Live Events
March 20-22, 2018, Denver Marriott Tech Center
March 22, 2018, Denver, Colorado | Denver Marriott Tech Center
March 28, 2018, Kansas City Convention Center
April 4, 2018, The Westin Dallas Downtown, Dallas
April 9, 2018, Las Vegas Convention Center
May 14-16, 2018, Austin Convention Center
May 14, 2018, Brazos Hall, Austin, Texas
September 24-26, 2018, Westin Westminster, Denver
October 9, 2018, The Westin Times Square, New York
October 23, 2018, Georgia World Congress Centre, Atlanta, GA
November 7-8, 2018, London, United Kingdom
November 8, 2018, The Montcalm by Marble Arch, London
November 15, 2018, The Westin Times Square, New York
December 4-6, 2018, Lisbon, Portugal
All Upcoming Live Events
Hot Topics
Dell CTO: Public Cloud Is 'Way More Expensive Than Buying From Us'
Mitch Wagner, Editor, Enterprise Cloud, 3/19/2018
Eurobites: Cambridge Analytica Feels the Heat
Paul Rainford, Assistant Editor, Europe, 3/20/2018
Is Business Voice Rapidly Fading?
Carol Wilson, Editor-at-large, 3/15/2018
Eurobites: BT Hires Sherman as Strategy Tank
Paul Rainford, Assistant Editor, Europe, 3/14/2018
Animals with Phones
Live Digital Audio

A CSP's digital transformation involves so much more than technology. Crucial – and often most challenging – is the cultural transformation that goes along with it. As Sigma's Chief Technology Officer, Catherine Michel has extensive experience with technology as she leads the company's entire product portfolio and strategy. But she's also no stranger to merging technology and culture, having taken a company — Tribold — from inception to acquisition (by Sigma in 2013), and she continues to advise service providers on how to drive their own transformations. This impressive female leader and vocal advocate for other women in the industry will join Women in Comms for a live radio show to discuss all things digital transformation, including the cultural transformation that goes along with it.

Like Us on Facebook
Twitter Feed