UBS: 'A potential storm is brewing' as AT&T,gear up for heated Q4
May 26, 2016
The first quarter saw more of the same mixed results in the U.S. wireless industry as handset upgrade rates reached an all-time low and subscriber growth slowed while profitability and margins topped records set just two quarters ago, UBS said in a research note."The key question is whether AT&T will continue to accept postpaid phone losses," UBS said. "Management is focused but not improving sub trends with new bundled offerings while attacking the low end of the market with its Cricket offering. We expect AT&T's aggressiveness to ramp in 2H with the expected launch of its new OTT products (creating the new digital bundle) and the next iPhone refresh."
Increased competition could result in slowing growth for AT&T, given massive debt, low gains in recent quarters, we think a potential storm is brewing as 4Q approaches."