AT&T (T) could lose as many as 40% of current subscribers who use the Apple (AAPL) iPhone once Verizon (VZ) starts selling a version of the phone, according to Davenport &� Co. analyst F. Drake Johnstone.
Johnstone thinks as many as 6 million of its current 15 million iPhone customers at AT&T could defect. He notes that AT&T recently said it will raise its early termination fee for customers that buy new smart phones from $175 to $325 – a sign that “AT&T is clearly worried that it will lose customers once a competing carrier such as Verizon begins carrying the iPhone,” he writes.
Johnstone chopped his forecast for 2011 wireless net subscriber adds to 2 million from 6 million – and says most of those could be from lower value connected devices like e-readers rather than higher value long-term wireless customers. Johnstone trimmed his 2011 EPS forecast to $2.27, from $2.36.
On his concerns about loss of customers, Johnstone cut his rating on T shares to Neutral from Buy.
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