By John Kell
AT&T Inc. (T) expects to report record third-quarter
smartphone sales next month, as well as stronger upgrades from
year-ago levels, but sees a slowdown in upgrades in the final
quarter of the year.
AT&T said while it sees higher smartphone upgrades in the
current quarter from year-ago levels, that metric will be lower in
the fourth quarter, due to AT&T's new 24-month upgrade policy
and given higher upgrade expectations for the third quarter. The
telecommunication giant also expects to grow its smartphone base by
more than one million in the third quarter.
AT&T, which left its full-year guidance unchanged, is
expected to report third-quarter results on Oct. 23. Analysts
surveyed by Thomson Reuters most recently expected AT&T to
report a 7% jump in profit on a 2% increase in revenue for the
third quarter.
The rosy commentary comes as AT&T and Verizon Wireless--a
joint venture of Verizon Communications Inc. (VZ) and Vodafone
Group PLC (VOD, VOD.LN)--have recently unveiled plans that bill
subscribers for the full price of their phones, which are broken
into monthly payments.
The change allows consumers to upgrade to new devices at a
faster pace, and shifts from the hefty subsidies AT&T and
Verizon offer for smartphones purchased with traditional
contracts.
On Friday, AT&T also disclosed that it closed on its roughly
$780 million acquisition of Atlantic Tele-Network Inc.'s (ATNI)
retail wireless operations. AT&T also said it was exploring
options to monetize some or all of the wireless tower assets it
owns.
Write to John Kell at john.kell@wsj.com
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