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AT&T Sees Third-Quarter Smartphone Sales Steady on Upgrade Plans

AT&T Inc. began providing an option in July to pay for phones and tablets on an installment plan, with the ability to upgrade yearly. Photographer: Andrew Harrer/Bloomberg
AT&T Inc. began providing an option in July to pay for phones and tablets on an installment plan, with the ability to upgrade yearly. Photographer: Andrew Harrer/Bloomberg

Sept. 21 (Bloomberg) -- AT&T Inc., the second-biggest U.S. wireless carrier, said it will report third-quarter smartphone sales similar to the 6.8 million it had from April to June, aided by new upgrade programs.

The result will be a record for any third quarter in AT&T’s history, the company said yesterday in a statement. Fourth-quarter smartphone upgrades will decline from a year earlier, though, because some customers went ahead and got new phones already.

AT&T began providing an option in July to pay for phones and tablets on an installment plan, with the ability to upgrade yearly. The promotion mimicked a service by T-Mobile US Inc., and Verizon Wireless and Sprint Corp. have since made similar offers. The program will help Dallas-based AT&T expand its base of smartphone users by 1 million this quarter, it said.

The company reported its third-quarter smartphone sales estimate on the same day Apple Inc. debuted new iPhones, an event that typically triggers a wave of upgrades among smartphone users. As many as 6 million of the new models could be sold worldwide in the first weekend, estimated Gene Munster, an analyst at Piper Jaffray Cos.

AT&T also said it expects to report a total of 10 million subscribers to its U-verse television and Internet services, with overall consumer landline sales growth similar to last quarter’s 2.4 percent year-over-year expansion. The company, which is scheduled to report third-quarter results Oct. 23, made no change to its full-year forecasts.

AT&T said it is exploring the sale of some or all of its cellular towers, meanwhile. Bloomberg News reported this week that the company is working with TAP Advisors LLC and JPMorgan Chase & Co. on the sale of the assets, which could fetch about $5 billion. Possible buyers include SBA Communications Corp., Crown Castle International Corp. and American Tower Corp., a person with knowledge of the matter said this week.

To contact the reporter on this story: Scott Moritz in New York at smoritz6@bloomberg.net

To contact the editor responsible for this story: Nick Turner at nturner7@bloomberg.net

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