AT&T expects $7.6B gain in Q4 2013

AT&T expects $7.6B gain in Q4 2013

23 JAN 2014

AT&T, the second-largest mobile operator in the US, said it expects to record a gain of around $7.6 billion in the fourth quarter of 2013, according to Reuters.

According to a regulatory filing, the non-cash, pre-tax gain will come from its pensions and post-employment benefits plans. This includes asset gains $3.2 billion above the 7.75 per cent rate of return expected.

The company said the gain will not affect the operating results or margins for the final quarter of 2013.

AT&T also expects to record a charge of around $500 million connected to redundancies and other charges related to its staff.

The company is due to report its fourth quarter results on 28 January.

The US number-two is facing increased competition from T-Mobile US’ ‘Uncarrier’ strategy which offers early device upgrades, lower prices than competitors and free international roaming. In addition, the smaller operator recently offered to pay early termination rates for customers of rival operators to switch to its services.

The result is that T-Mobile US has gained subscribers from other networks. The company’s CEO John Legere revealed at CES that his company attracted 1.65 million net additional customers during the fourth quarter of 2013.

AT&T has sought to counter the progress being made by T-Mobile with a promotion offering T-Mobile subscribers as much as $450 in credits towards devices and services if they switched to the bigger operator.

In October, AT&T unveiled a $4.85 billion cash deal to sell or lease nearly 10,000 cell towers to Crown Castle, approximately doubling its cash reserves with which to compete more effectively in the US market.

Meanwhile US market leader Verizon Wireless this week reported a strong set of fourth quarter financials, with a fifth consecutive quarter of “at least 8 per cent” service revenue growth and adding 1.7 million retail connections to take its total to 102.8 million.


Tim Ferguson

Tim joined Mobile World Live in August 2011 and works across all channels, with a particular focus on apps. He came to the GSMA with five years of tech journalism experience, having started his career as a reporter... More

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