AT&T’s Future Depends on Mobile Data
The average revenue per user (ARPU) for AT&T’s (NYSE:T) mobile data (SMS, internet, games) is expected to increase over the coming years, while AT&T’s average revenue per user for mobile voice services is projected to decline gradually.
Trefis members have created forecasts for two key drivers of AT&T’s stock over the last week: (1) SMS & Internet Revenue per AT&T Mobile Subscriber and (2) Mobile Subscriber Plan Pricing. The member forecasts suggest that both drivers will trend in-line with the estimates of the in-house team of analysts at Trefis.
AT&T competes with other mobile service providers Sprint Nextel (NYSE:S) and Verizon (NYSE:VZ) as well as VOIP providers Comcast (NASDAQ:CMCSA) and Time Warner Cable (NYSE:TWC). We currently have a Trefis price estimate of $38 for AT&T’s stock, about 44% above the current market price of around $27.
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AT&T’s stock is quite sensitive to (1) SMS & Internet Revenue per AT&T Mobile Subscriber and (2) Mobile Subscriber Plan Pricing. Below are charts showing recent estimates created by Trefis members for the two drivers in detail.
1. SMS & Internet Revenue per AT&T Mobile Subscriber
The average of Trefis member forecasts for SMS & Internet Revenue per AT&T Mobile Subscriber indicate an increase from $16 per month in 2010 to around $27 per month by 2016, compared to the baseline Trefis estimate of an increase from $17 per month in 2010 to $28 per month by the end of the Trefis forecast period. The member estimates imply a downside of 1% to the Trefis price estimate for AT&T’s stock. In the past, SMS & Internet Revenue per AT&T Mobile Subscriber has increased from $3 per month in 2003 to $14.50 per month in 2009.
Disagree? You can drag the forecast trend-line above to express your own view, and see the sensitivity of AT&T’s stock to SMS & Internet Revenue per AT&T Mobile Subscriber.
Our complete analysis for SMS & Internet Revenue per AT&T Mobile Subscriber is here.
2. Mobile Subscriber Plan Pricing
The average of forecasts for Mobile Subscriber Plan Pricing created by Trefis members indicated a projected decrease from $39 per month in 2010 to $37 per month 2016, compared to the baseline Trefis estimate of a decrease from $40 per month in 2010 to $38.50 per month by the end of the Trefis forecast period. The member estimates imply a downside of 1% to the Trefis price estimate for AT&T’s stock. In the past, Mobile Subscriber Plan Pricing has decreased from $55.50 per month in 2003 to $42 per month in 2009.
Disagree? You can drag the forecast trend-line above to express your own view, and see the sensitivity of AT&T’s stock to Mobile Subscriber Plan Pricing.