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AT&T Adds Nearly Two Million Subscribers Amid Tablet, Smartphone Gains

The gains come amid intense competition from both Sprint and T-Mobile.

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AT&T said Tuesday that it gained nearly two million customers last quarter despite intense competition, though the bulk of gains came from tablets and other connected devices, such as cars.

When it comes to the core of the wireless business — postpaid smartphone customers — AT&T said it added 148,000 such subscribers for the quarter.

As a result of a number of charges, AT&T lost $4 billion, or 77 cents per share, on revenue of $34.4 billion. Excluding various items, the company said it would have had a profit of 55 cents per share, roughly in line with what analysts were expecting and up two cents per share from the prior year.

AT&T has been in the midst of shifting the bulk of its wireless customers from traditional plans to ones where data is shared among multiple devices. AT&T said it now has more than 52 million devices on shared-data plans, representing nearly 70 percent of its postpaid customers. Half of those accounts are sharing 10 gigabytes or more of data.

The carrier is also aiming to move away from subsidizing new phone purchases, with 58 percent of its subscriber base now on a plan without a device subsidy.

“The groundwork has now been laid for 2015 and beyond,” CEO Randall Stephenson said in a conference call on Tuesday.

In its wired business, AT&T said it added 405,000 U-verse high-speed Internet subscribers and 73,000 U-verse TV subscribers.

The earnings report comes amid heightened competition in the market, with both Sprint and T-Mobile aggressively trying to woo subscribers from AT&T and Verizon. Sprint’s most recent promotion offers to cut in half the service portion of the bill for customers switching from one of the two larger carriers, while T-Mobile has been pitching a number of offers, including one that lets customers carry over paid-for but unused data for up to a year.

AT&T has also been on an expansion streak, agreeing to purchase both DirecTV and two Mexican carriers, including a deal announced Monday to purchase Mexican assets of Nextel International.

Stephenson demurred on whether AT&T might still be interested in buying assets from America Movil, but said that the assets from the two announced deals are “more than sufficient” to compete in Mexico.

He seemed to rule out any move into Canada in the short term, saying, “We have as much as we as a company can handle. We’ve got a lot to execute on.”

As for the coming year, Stephenson said AT&T expects to grow its revenue even before the impact of these new deals and added that the company will offer more detailed guidance for 2015 once it closes the DirecTV deal, which the company expects in the first half of this year.

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