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AT&T Shares Fourth Quarter Earnings in SEC Filing


AT&T is scheduled to share its fourth quarter earnings report on January 25. But before the date arrives, it already shared some relevant key numbers with the public in a filing with the SEC. 

On the document, AT&T revealed that they were able to add about 900,000 domestic wireless subscribers. Out of this number, around 37 percent were for labeled as phone net additions. Since AT&T's network is supportive of automotive connections, tablets, and other connected devices, it is important to determine the number it gained for its phone services.

Further examining its net adds, AT&T identified that 500,000 of the branded net adds they had in Q4 were for postpaid connections. Meanwhile, the remaining 400,000 were on prepaid accounts. Considering AT&T was the first to introduce an IoT data plan among the major US carriers, they believe that many of the prepaid connections were on non-phone subscribers. 

On the same quarter, the carrier deactivated around 700,000 users who were still using the 2G network; 50,000 of which belonged to postpaid connections. Before deactivating these subscribers last year, AT&T noted that it still had around 2.3 million subscribers who were using 2G network and non-voice phone connections. Out of this number, 100,000 were postpaid subscribers. 

At the start of the year, AT&T discontinued its 2G service. On a blog post written by AT&T chief strategy officer John Donovan, AT&T expressed that with their move to shut down 2G network, they are able to free up more spectrum for network technologies they plan to use in the future. This included 5G technology, which many other carriers are gearing up for. After shutting down 2G, 99 percent of the people in the US are now covered by AT&T's 3G and LTE networks. 

The carrier continued to share that they obtained 1.2 million wireless net adds in Mexico as well as 200,000 subscriptions on DirecTV. In 2015, AT&T was able to buy Nextel Mexico, Iusacell (a Mexican carrier), and DirecTV. 

Despite what seemed to be a successful Q4 for the carrier, AT&T announced that they had a non-cash loss amounting to $1 billion. According to the carrier, this loss was brought about by a shift in how they accounted pension obligations. This stems from the carrier's decision to adjust its assumed discount rates for measuring pension obligations from 4.6 percent to 4.4 percent. Additionally, they changed the post-retirement obligations rate from 4.3 percent to 4.5 percent. With these changes, the carrier obtained a loss amounting to $3 billion. But since $2 billion of this was canceled out by lower claims, demographic changes, higher-than-expected asset returns, mortality and other assumption changes, the total loss only amounted to $1 billion. 

AT&T is confident, however, that the loss they obtained from the changes with their pension fund will not have a direct effect on their operating results or margins. After the announcements, AT&T's stock opened at a higher amount.

Source: RCRWireless

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