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AT&T expects customer usage of NEXT to reach 50 percent in third quarter

Posted by: Admin | Posted on: September 30th, 2014 | 0 Comments

WASHINGTON (Reuters) – ATT Inc (T.N) expects that customer use of its equipment installment plan will have reached 50 percent in the third quarter, the company said in a regulatory filing on Tuesday, fewer customers than analysts expected.

Last year, faced with growing competition from rivals, ATT debuted its NEXT equipment financing plan, which decouples the cost of service from the cost of devices.

In July, ATT said it expected two-thirds of its customers to be on the plan by the end of the year.

In previous quarters, the equipment financing plan has resulted in a lower average revenue per user for ATT but higher equipment revenue, as customers take on the majority of the burden of paying for their devices.

A shrinking base of new customers has made the wireless industry increasingly competitive, with carriers slashing prices and launching new plans every few weeks as they vie for customers.

Still, ATT, in its filing released on the final day of the third quarter, said it expects its postpaid customer defection rates to remain at 1 percent or lower for the quarter. The company will release third-quarter results in October.

As the market for new smartphone customers shrinks, wireless companies are turning to connected devices for growth.

ATT said it expects to service nearly half of new connected vehicles in 2015. Connected cars link to a wireless provider’s network and allow drivers to unlock a car remotely and make it a wireless hot spot for other devices, among other functions.

ATT said it currently provides connectivity to nearly 2 million cars and added 500,000 cars in the third quarter.

The carrier expects to connect more than 10 million vehicles by the end of 2017.

(Reporting by Marina Lopes; Editing by Leslie Adler)

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