On the Call: AT&T CFO on prepaid wireless

NEW YORK

AT&T Inc. reported the addition of 512,000 contract-signing wireless customers under contract in the first quarter, a low number compared to the last five years. Across the industry, most of the growth is now coming from customers who prepay for service and don't sign contracts. Those customers pay less than contract-signing -- or so-called "postpaid" -- customers, and AT&T hasn't been aggressive in chasing their business. Instead, it's emphasizing that more of its postpaid customers are signing up for data plans, meaning each one pays more.

However, AT&T does sell wholesale access to its network to resellers like Tracfone LLC, who provide prepaid service, and that business has been growing.

On a conference call following AT&T's earnings report Wednesday, Chief Financial Officer Rick Lindner got a question from an analyst about the balance between prepaid and postpaid business.

QUESTION: Are you comfortable with your positioning in prepaid or should we expect you to engage to a greater extent in the segment?

ANSWER: Certainly our expectation for this year is that postpaid customer growth net adds will come down from prior levels ... In the prepaid part of the business, we have in the last year been making some changes and tweaks in our prepaid offerings. We've also made some changes and tweaks to reseller category this are primarily prepaid in nature, and as a result what you saw this quarter is continued to growth in the reseller category but also small but positive growth in prepaid.

... We'll continue to tweak those offers in the market place and continue to work to drive some growth in those categories.

A couple of things that we don't do: We won't chase growth we feel is not profitable. We won't do things that could bring a significant impact or a negative impact to our postpaid business. That's still to a large degree where our focus is, and there's a lot of opportunity there.