AT&T and Verizon warn investors of higher Q4 churn as Sprint and T-Mobile increase competition

While the traditional wireless landscape in the United States has consisted of AT&T and Verizon Wireless as the heavyweights and Sprint and T-Mobile as the underdogs, the divide between the carriers appears to be quickly narrowing. Sprint and T-Mobile have both introduced highly-competitive plans and promotional offerings in the fourth quarter, leading many consumers to switch carriers at a higher-than-average pace.

AT&T Chief Financial Officer John Stephens confirmed at an investors conference on Tuesday that the carrier is facing a higher subscriber churn rate than a year ago, even despite the fact that its overall subscriber base continues to grow. In other words, AT&T is dealing with a higher number of subscription cancellations now compared to this time last year as customers opt for the more affordable competitors like Sprint and T-Mobile.

According to The Wall Street Journal and Barrons, Verizon is also feeling the pinch due to a “highly competitive and promotion-filled fourth quarter,” and it too expects to have a higher churn rate as customers flock elsewhere. Verizon cautioned that its need to offer more competitive promotions to customers will affect its EPS and overall profitability.

T-Mobile in particular continues to make impressive strides under the leadership of chief executive John Legere, who has positioned the magenta-colored company as the “Uncarrier” in the industry by eliminating several of the so-called “pain points” that relate to lengthy contracts, expensive plans, early termination fees, overage charges, upgrade programs, and confusing policies.

One thing is for certain: the increasingly competitive environment should be a win for all customers that belong to one of the big four carriers in the United States as they compete to keep and grow their subscriber base.