AT&T Customers Keeping Their Smartphones Longer, Says Senior Executive

AT&T sold fewer handset upgrades but more protection since it began selling smartphones at full price without subsidies, said AT&T Senior Vice President Steve Hodges Wednesday at the Baird 2016 Global Consumer, Technology & Services Conference in New York. AT&T previously sold expensive phones at what appeared to be low prices, subsidizing the high cost with higher service rates. But today, customers pay either full price upfront or smaller monthly payments over time. In the live-streamed presentation, Hodges said the increased transparency about price has meant consumers better understand the value of their devices and take more care to extend their lifespans. AT&T had its lowest handset upgrade rate ever in Q1, but the company also sold more cases, screen protectors and handset insurance, he said. “There was this unintended element of people seeing the value and all of the sudden starting to take care of it differently.” But “iconic” phone launches could still sway consumers to buy the latest model, said Hodges. “This is like global warming -- I don't know. It's just a tough one to predict.” Also in the presentation, Hodges said AT&T sees IoT, the Cricket brand and expansion into Mexico as big growth opportunities. Most connected cars are on the AT&T network, he said. Cricket, which targets “low-end” customers seeking value, has strong average revenue per user, he said. And Mexico is a market of 80 million people that also gives AT&T the capability to provide roaming between the U.S. and its southern neighbor, “a powerful proposition,” he said.