More wireless carriers report slower growth

Shares of AT&T Wireless Services fell more than 20% Wednesday morning to an all-time low after the company said it would add 20% fewer customers for the year than it had previously expected.

The company added 417,000 customers in the second quarter, short of analysts’ estimates of 550,000 subscribers. Analysts, however, were pleased with AT&T Wireless’ improvement in churn and average revenue per user. Churn was 2.4%, compared with Wall Street’s estimate of around 2.6%, while ARPU jumped to $60.40 ahead of estimates in the $58 range.

As for the slowdown in growth, AT&T Wireless blamed an industrywide slump in customer growth, more intense competition and a loss of subscribers from reseller partner WorldCom, which is exiting the wireless business.

Leap Wireless International also added fewer-than-expected subscribers in the second quarter and cut its full-year subscriber estimate to a range of 1.7 million to 1.8 million customers from a previous estimate of at least 2 million. It ended the second quarter with 1.452 million customers, below its expectations of at least 1.5 million. Leap’s loss widened to $158.6 million, or $4.23 a share, from $128.5 million, or $3.91 a share, the previous year.

Leap Chairman and Chief Executive Officer Harvey White said his company is successfully mitigating fraud problems, which hurt the carrier in the first quarter. But more aggressive dealer incentives launched by its competitors have contributed to the company’s slower-than-expected customer growth.