AT&T (NYSE: T) executives surely breathed a sigh of relief that its iPhone customer turnover numbers remained the same as Q110, as endured its first full quarter sharing rights to the Apple (NSDQ: AAPL) device with Verizon. Rick Lindner, who is retiring as AT&T’s CFO in June, offered a few thoughts on how it maintained those rates and even went so far as to say the company doesn’t expect vast changes in iPhone churn over the next few months either.
Most observers would explain the lack of churn on customers being locked in to contracts. While that surely helped, Lindner said that doesn’t provide a full explanation. “Having Verizon handle the iPhone had been known by customers for months and we still saw upgrades through out Q3 and Q4,” Lindner said, suggesting that customers could have simply waited to have their plans with AT&T expire and take their iPhone over to Verizon.
“Secondly, customers did have the ability to break the contract, sell the device and recover the termination fees,” Lindner added on what was his last earnings call with the company. “What did have an impact was our competitve data plan and the strength of our network, as well as the the ability of customers who travel to use their phone internationally is important. We’re not expecting any changes in churn rates over the next few months either.”
Ultimately, managing expectations also helps. For example, Lindner did note that there was a small increase in post-paid churn in Q1. “But the impacts were less than we expected and was was predicted in the media. And we continued to grow post-paid ARPU. It speaks to the strength of our customer base and our customer relationships and our wireless data franchise.”