AT&T's postpaid wireless adds drop, U-verse adds grow

AT&T (T) saw 363K wireless postpaid net adds in Q3 (388K from tablets), down from 551K in Q2 and 398K in Q1. Verizon had 927K postpaid net adds in Q3. Thanks to new Aio and GoPhone service plans, AT&T's prepaid net adds rose to 192K from 11K in Q2 and -184K in Q1.

Wireless service revenue +3.7% Y/Y in Q3 vs. +5.1% in Q2, thanks to a 17.6% increase in data revenue. Wireless op. margin -50 bps Y/Y to 26.4%, EBITDA service margin +40 bps to 42%. Postpaid ARPU (inc. tablets) rose 1.5% Y/Y. 75% of postpaid subs now use smartphones, up from 73% in Q2.

655K U-verse Internet subs and 265K U-verse TV subs were added vs. 641K and 233K in Q2. The total U-verse sub base is now above 10M.

Wireline revenue -1% Y/Y vs. -0.9% in Q2. Data revenue +5.9%, but voice revenue -9.7% thanks to an 11.7% drop in voice connections. Wireline op. margin was 10.6%, -150 bps Y/Y.

$1.9B was spent on buybacks, down from $3.3B in Q2. Free cash flow was $3.2B, below net income of $3.8B.

T nearly unchanged AH. CC getting started.

Q3 results. PR

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