AWS continues poor performance....adds 170,000 subs

[bobolito]

Reuters
AT&T Wireless Posts Lower Profit
Tuesday October 19, 6:31 pm ET


NEW YORK (Reuters) - AT&T Wireless Services Inc. (NYSE:AWE - News) said on Tuesday its third-quarter profit declined as customers spent less per month, offsetting a rise in net new customers.

The Redmond, Washington-based wireless services operator, which is waiting for regulatory approval for its $41 billion sale to Cingular Wireless (NYSE:SBC - News; NYSE:BLS - News), said its profit was $117 million, or 4 cents a share compared with a profit of $156 million, or 6 cents a share a year earlier.

Total revenue fell 2.7 percent to $4.2 billion.

Even as its competitors enjoy an upswing with subscribers gabbing more on the phone and spending more on new services, AT&T Wireless continues to be hamstrung by customer defections.

"It's a growth industry and they're not growing. They're unique in that regard," said Kevin Roe of Roe Equity Research.

While it added 170,000 net new subscribers in the quarter, more than 2.3 million subscribers dropped AT&T Wireless service. It ended the quarter with 21.9 million subscribers.

"Customer deactivations persist at unacceptable levels," John Zeglis, AT&T Wireless chairman and CEO said in a statement. "We have a number of initiatives underway addressing this issue and are extremely focused as an organization on turning it around."

The average estimate for net new subscribers was 92,000 with targets ranging from 20,000 to 200,000, according to eight analysts contacted by Reuters.

AT&T Wireless, currently the third biggest U.S. mobile provider, agreed to be sold to Cingular Wireless in February after its customers fled its service as technology and service snafus coincided with new rules making it easier for consumers to switch providers.

The deal, which is expected to close this month, will create the biggest U.S. mobile provider. But analysts believe poor growth at AT&T Wireless in the run up to the transaction will hurt the combined company's ability to compete.

"At this point it doesn't really matter for the deal anymore. It goes through either way," Phil Cusick, an analyst at Bear Stearns said.

AT&T Wireless said churn -- the percentage of customers canceling their service in the quarter -- was 3.7 percent compared with 3.4 percent in the second quarter.

Average monthly revenue per customer, a key measure for wireless companies, fell to $57.40 from $58.80 in the second quarter.

Cingular, a joint venture between SBC Communications Inc (NYSE:SBC - News) and BellSouth Corp (NYSE:BLS - News), is expected to report its third quarter earnings before the market opens on Wednesday.

"I don't think there's anything in these results that presents new challenges," Roe said. "Cingular's going to have to right the ship."


http://biz.yahoo.com/rb/041019/telec...ireless_1.html

[bobolito]

"We have a number of initiatives underway addressing this issue and are extremely focused as an organization on turning it around."


Turning around what? They are weeks from being acquired. How is he thinking to have time to turn anything around?


By the way, here's the full press release in Adobe Reader format:
http://www.attwireless.com/wirelessi...essRelease.pdf

[ehcruzan]

Originally Posted by bobolito "We have a number of initiatives underway addressing this issue and are extremely focused as an organization on turning it around." Turning around what? They are weeks from being acquired. How is he thinking to have time to turn anything around? By the way, here's the full press release in Adobe Reader format: http://www.attwireless.com/wirelessi...essRelease.pdf

The guy is obviously halucinating! He'll get a taste of involuntary termination very soon!

[Mobile Mike]

It's amazing to see that AWS 170,000 new ads were essentially washed out by over 2 million disconnections.

Cingular will definitely have their hands full with this mess.

[bobolito]

Current AWS defections are directly linked to many factors, primarily company positioning in the minds of the customers and the downfall of the AT&T Wireless name. Basically, it is all related to customer feelings and not so much with current network or service problems. There are many people leaving AT&T Wireless today simply because of its name and reputation or simply because they had a problem with them a long time ago and now their contracts are expiring so they want to leave. This will all change once the AT&T Wireless name is eliminated because people won't see the AT&T Wireless name anymore and they will feel as being part of another company. Customer sentiment and service quality personal perception is closely linked to a company's name, so once this name is eliminated from the market, current AWS customers won't feel attached to it anymore and hence will feel different about their service even though service will continue to be the same.

This brings up another issue: Because of this wound in AT&T's reputation and name, the question is will AT&T Corp. be successful with their joint venture with Sprint?

[MOTOhooligan]

Originally Posted by bobolito This brings up another issue: Because of this wound in AT&T's reputation and name, the question is will AT&T Corp. be successful with their joint venture with Sprint?

Probably not... I don't see the point in doing it anyway, all it will do is increase Sprint's network traffic and ensure that I never have service with either company.

[Mobile Mike]

Originally Posted by bobolito This brings up another issue: Because of this wound in AT&T's reputation and name, the question is will AT&T Corp. be successful with their joint venture with Sprint?

If there's money to be made, I'm sure AT&T will find a way. Whether consumers will care or not is another story.

[Andy]

Fascinating how about 2 million people left, but they still had net adds of 170,000. In malls around my area, AT&T reps are bugging the crap out of people trying to get you to talk to them and trying to pull you into a contract; they won't give up, even if you tell them that you're happy with another carrier. You have to, sometimes, literally leave for them to stop.

[Fire14]

I wonder how many people left AT&T and went to Cingular as there carrier, since Cingular had such a large addition of people this past qtr.

And in reguards to your post bobolito, I would think AT&T Corp would be on AWE to keep the name popular, so when they go into the wireless line with Sprint, the name still has some meaning for them to be able to sign up customers.
This will be an interesting year with the merger then AT&T going back into the business, and to see if Cingular can stop the losses at both carriers when they become 1, & can continue to stay #1 over Verizon for a long time.

[bobolito]

See, the thing is not about AWS losing customer....the thing is customers are leaving AWS because it is STILL AWS! Once it becomes Cingular AWS won't be AWS anymore.

If when the AWS name re-emerges as an MVNO, it will carry over the same reputation it has now (maybe a bit less because time erases old grudges). The bad AWS reputation will not really carry over to Cingular because the customer perception of AWS is directly linked to its name....so that will mostly go away with the Cingular acquisition because of the name change. The hurt image will come back when AT&T revives the AT&T Wireless name under the MVNO with Sprint.

[agentHibby]

I wonder if anyone know where AT&T has a established network and Cingular does not (like Utah) does AT&T still have high turnover, so is in areas where AT&T and Cingular have a network and people are going to Cingular Wireless.
Or it is everywhere AT&T Wireless is loseing everywhere!

[agentHibby]

AT&T Wireless will probably end in January (Agenthibby prediction) at the rate things are going.
So about July 2005 AT&T will be able to be an MVNO. It is possible before July AT&T plans to merge with another phone company and AT&T Wireless MVNO gets scrapped. Will that happen?? only time will tell.

[bobolito]

I don't know about scrapping the plans. They signed a 5-year contract with Sprint. They can't just scrap it.

Carriers won't give out regional/local customer adds info or churn info for competitive reasons. It is a highly guarded secret!

[Scrumhalf]

Originally Posted by agentHibby I wonder if anyone know where AT&T has a established network and Cingular does not (like Utah) does AT&T still have high turnover, so is in areas where AT&T and Cingular have a network and people are going to Cingular Wireless. Or it is everywhere AT&T Wireless is loseing everywhere!

Good point... Cingular does not have any licenses in Oregon, so any ATT losses are most likely to the CDMA carriers. It would be interesting to see a state by state breakdown of the subscriber losses.

[Fire14]

Originally Posted by agentHibby AT&T Wireless will probably end in January (Agenthibby prediction) at the rate things are going. So about July 2005 AT&T will be able to be an MVNO. It is possible before July AT&T plans to merge with another phone company and AT&T Wireless MVNO gets scrapped. Will that happen?? only time will tell.

Cingular has an agreement with AT&T Corp to keep the name for 6 months after the merger to avoid confusion with customers, till they get all the information out to the customers that the merger has been completed & everyone is a Cingular customer.
So the July 05 date is a very real & good date for AT&T Corp to start the MVNO.

[jones]

Originally Posted by bobolito "We have a number of initiatives underway addressing this issue and are extremely focused as an organization on turning it around." Turning around what? They are weeks from being acquired. How is he thinking to have time to turn anything around?

By sweetening their RATE PLANS.
Right now they should be the one saying
"GET MORE" not T-Mobile.
They offer more minutes plus their Nights starts at 7 PM

[bobolito]

Jones, remember what happened on Feb. 17th this year? AT&T announced that it had agreed to be acquired by Cingular. Remember that? Well, as I said before, they are within weeks of being acquired? Can you explain to me how on Earth is John Zeglis going to have time (within weeks) to turn around a company that has not turned around since last year?

[Fire14]

Originally Posted by bobolito Jones, remember what happened on Feb. 17th this year? AT&T announced that it had agreed to be acquired by Cingular. Remember that? Well, as I said before, they are within weeks of being acquired? Can you explain to me how on Earth is John Zeglis going to have time (within weeks) to turn around a company that has not turned around since last year?

I think he is turning them around IN HIS DREAMS

[Mobile Mike]

I thought I read somewhere recently that AT&T Wireless will keep their name for the first six months of the completed merger, then Cingular will put its name on it. What I wonder is if AWS continues to have problems, how would the name change to Cingular really fix it? Cingular is inheriting a mess of a company. I wonder how well they can control the bleeding. I also wonder if the remnants of AWS will start to poison Cingular over time?

[Fire14]

I am sure Cingular will be able to control the bleeding very well, they are run much better then the AT&T Wireless corp. & I am sure they will get rid of alot of the problems as well as problem executives that can't make good decisions on how to run the company.
If you think about it, Cingular has been moving along extremly well in the shorter time they have been around vs AWE.

[Etorres777]

Yesterday when I was upgrading and re-newing the contract, I saw some AWS employees starting to train on a computer for the Cingular system. It even had their logo and name and stuff. The guy at the AWS said the merger was already approved and by next month they're going to start changing everything to Cingular. Well, atleast here. By the way, I LOVE MY V505!

[WiggyFife]

Originally Posted by Etorres777 Yesterday when I was upgrading and re-newing the contract, I saw some AWS employees starting to train on a computer for the Cingular system. It even had their logo and name and stuff. The guy at the AWS said the merger was already approved and by next month they're going to start changing everything to Cingular. Well, atleast here. By the way, I LOVE MY V505!

that sounds encouraging!!! Thanks for the info...

[Fire14]

Originally Posted by Etorres777 Yesterday when I was upgrading and re-newing the contract, I saw some AWS employees starting to train on a computer for the Cingular system. It even had their logo and name and stuff. The guy at the AWS said the merger was already approved and by next month they're going to start changing everything to Cingular. Well, atleast here. By the way, I LOVE MY V505!

I am real confused about this, Nothing has been approved officially yet, so i don't see how they can be training on Cingular's system yet. I thought they couldn't do anything like this till it's officially approved.
And glad to hear you love the V505, everyone that has it is saying the same thing.

[bobolito]

Originally Posted by lbmike212 I thought I read somewhere recently that AT&T Wireless will keep their name for the first six months of the completed merger, then Cingular will put its name on it. What I wonder is if AWS continues to have problems, how would the name change to Cingular really fix it? Cingular is inheriting a mess of a company. I wonder how well they can control the bleeding. I also wonder if the remnants of AWS will start to poison Cingular over time?

1- Cingular has a contract to keep the AWS name for six months. Now, Cingular can drop the name anytime before the six months even though they have the rights to the name for the entire period. Therefore, no one knows how long Cingular will really keep the name. They might drop it before the six months, and I believe for their sake, they will drop the AWS name ASAP.

2- Now, the problems AWS is having right now, is not so much with the company itself. The problem is primarily with the customers that still have a bad aftertaste of what happened in the last quarter of last year and the beginning of this year. Right now, AWS provides as good service as Cingular and it has for the last few months because of the roaming agreements and the great effort in improving their GSM network, especially with the launch of 850Mhz channels in the areas where they have Cellular licenses. The bleeding of customers is nothing more than something called "positioning" which (in marketing) is the way customers see a company. Right now, for many AWS customers, their mind is simply predisposed to believe that their AWS service is bad, even if there's nothing wrong with it, so they can think of nothing else than waiting for their contract to end so they can change companies. And as long as the AT&T Wireless name exists, these customers will still believe the problems will continue, even though they have been solved a long time ago. The sole name change to Cingular will immediately change customer's perception (and positioning) because customers will feel they are dealing with a different company, even though they are being served by the same set of towers and they will continue to receive the same service. This is how the Cingular acquisition will help stop customer defections at AWS, because there will be no more AWS. And basically, AWS has been doing what Cingular says, at least under the table. They are not trying to disguise the fact that they have been doing things "the Cingular way" for months now. So once AWS falls into the hands of Cingular, customers will feel the devil they've been running away from all the sudden will disappear and they will have less reason to change carriers. For many AWS customers, there's really nothing wrong with the service. They just feel it is bad because of what happened, so they still keep on fleeing. The name change is the only way to stop them.

Bottomline, it takes a long time to change the mindset of millions of customers, especially after a screw up like AWS did. The quickest way to change that is by changing the company name and doing some marketing tricks with it. Keep the same company name, and the customers will still see the same evil in it, regardless of how much the company changes.

Now, if the guys at AT&T Corp. (Ma' Bell) are smart, they will wait until the AT&T Wireless name heals itself before venturing in this deal with Sprint PCS. People basically need time to forget the fiasco AT&T Wireless went through so they can learn to trust the brand again. It is a slow and painful process.

[Fire14]

Very nicely put, I can say my coverage & service has improved over the last year, but prior to that i rode out the problems & tried to keep a positive mindset with AWE. And alot of people when you mention AWE give you a funny look still thinking they are still having the problems from last year & the beginning of this year, when i tell them i have no problems with service they think i'm nut's, till they can't use there phone & i can make & recieve calls with no problems. This really gets the Verizon & Nextel people looking funny

[bobolito]

LOL!...I can see your looking like the AT&T Wireless commercial with the bars over your head!

[Fire14]

Originally Posted by bobolito LOL!...I can see your looking like the AT&T Wireless commercial with the bars over your head!

Oh you don't have them do you? They are a good conversation piece. LOL

[agentHibby]

Originally Posted by bobolito LOL!...I can see your looking like the AT&T Wireless commercial with the bars over your head!

I think that AD campanie is bad for AT&T. When I am home you get zero bars with a new AT&T phone Because it won't WORK! No GSM I get 5/4 bars with Verizon's affilate or mom and brother get 4/3 bars with US Cellular's CDMA & TDMA.

[dallison]

att does have limited access to cingular systems to get familiar.



so awe lost 330,000 q1 (net)
added 15,000 q2 (net)
added 170,000 q3 (net)


so they still have no growth for the year, they are still in the hole by 145,000 customers

[NYCDru]

Umm...those are NET numbers. they also lost 2 million this past quater. What is there GROSS size now? And for that mater, what are cingular and VZW's GROSS sizes right now?