AT&T had a first quarter full of bests. Despite the arrival of the iPhone 4 on Verizon, AT&T's iPhone activations increased by nearly 1 million year-over-year.
AT&T announced fiscal first-quarter
2011 results April 20 that were peppered with records. While many wondered
whether the arrival of an Apple iPhone 4 on competitor Verizon Wireless'
network in February would sound a death knell for AT&T-which during its four-year
tenure as the exclusive provider of the iPhone had suffered loud complaints
from customers regarding the quality of its network-in preparation it had
stocked its mobile portfolio with a variety of devices, including
Android-running smartphones, and it managed to sell 5.5 million smartphones and
add 2 million new wireless subscribers during the quarter, both first-quarter
bests for the company.
AT&T's iPhone activations also
increased by nearly 1 million year-over-year to 3.6 million during the quarter,
and it saw an overall profit of $3.4 billion-up from $2.5 billion a year ago-on
consolidated revenues of $31.2 billion.
"We entered this quarter and this
year with some questions and some uncertainty, primarily related to the change
in iPhone exclusivity and the impacts that would have on our business.
Hopefully, we've answered those," out-going AT&T CFO Rick Lindner said
during an April 20 call with analysts and media.
"Was there an impact from another
carrier launching the iPhone? The answer was yes, there was," Lindner
continued. "We saw a very small increase in postpaid churn, and we saw a
slight decline in overall flowshare. But the impacts were significantly less
than many in the financial community and the media expected, and frankly the impacts
were less than we expected. And we continued to grow our postpaid base. We
continued to grow our iPhone base. We continued to grow postpaid ARPU [average
revenue per user] and had significant growth in wireless data revenues."
Helping to drive ARPU, said Ralph de la
Vega, president and CEO of AT&T's mobility and consumer markets division,
were sales of RIM BlackBerry handsets, smartphones running Google's Android and
Microsoft's Windows Phone OS, and AT&T's "fundamental strategy to
drive customers into smartphones with higher data plans."
De La Vega said AT&T has been
promoting low-cost smartphones, such as the HTC Inspire
, as well as new Android phones like
the Motorola Atrix-"which is selling very, very well"
has seen an increase in customers moving from messaging devices and feature
phones to smartphones.
AT&T also enjoyed an increase in
tablet sales, with its "branded computing subscribers"-those using
data-only devices, including aircards-doubling since the first quarter of 2010
for a total of 3.4 million subscribers. This growth, along with rapid
smartphone sales, emphasizes AT&T's need to grow its mobile broadband
AT&T's growth, AT&T CEO Randall
Stephenson said in a statement, is why the company's "agreement to acquire
T-Mobile USA ... is so important. Combined, the two companies' spectrum and
network assets will allow us to simultaneously address spectrum issues created
by this increased demand and improve customers' network experience as volumes
continue to grow."
Its proposed purchase of T-Mobile for
$39 billion in cash and stocks has raised questions about the degree of
competition that would remain in the industry, were the deal to be approved,
and the Federal Communications Commission and other federal agencies have said
they plan to consider and comb over it quite carefully.
AT&T, however, addressed the
completion of the deal not so much as an "if" but a "when."
"Beyond 2011," Lindner said
in his closing comments during the call, "we look forward to closing our
acquisition of T-Mobile and to delivering all the benefits and all the promises
of a strong, nationwide, wireless broadband network to our customers, to the
nation and to our shareholders."