Despite a record number of iPhone sales and activations, AT&T
posted flat third quarter profits Oct. 22 as revenue fell 1.6 percent
to $30.86 billion. The iPhone sales were driven by the introduction of
the iPhone 3G just prior to the start of the third quarter and Apple's
subsequent price cuts to as low as $99 for the device.
For the
quarter, AT&T, the exclusive U.S. provider of iPhones, activated
3.2 million
iPhones, the telecom giant's largest quarterly total to date. Nearly 40
percent of the iPhone activations were for new customers.
With
the record number of iPhone activations, AT&T also enjoyed a 3.8
percent increase in customers signing annual contracts with the average
customer spending $61.23 a month. In the second quarter, AT&T
reached an average monthly bill of $60 for the first time.
"We delivered a terrific wireless quarter, IP data growth was strong
and execution across the business continues to be solid," said Randall
Stephenson, AT&T's chairman and CEO.
AT&T
also saw data services revenue jump almost 34 percent in the third
quarter. Wireless data revenues from messaging, Internet access, access
to
applications and related services increased $916 million, or
33.6 percent, from the year-earlier third quarter to $3.6 billion, more
than double the company's total in the third quarter two years earlier.
Data represented 29.4 percent of AT&T's third-quarter wireless
service revenues, up from 24.2 percent in the year-earlier quarter and
18.4 percent in the third quarter of 2007. Wireless text messages on
the AT&T network exceeded 120 billion, nearly double the total for
the year-earlier quarter.
AT&T's
traditional wireline business, though, continued to decline. In the
third quarter, the company's wireline business fell 7.1 percent to
$16.3 billion. The number of AT&T local land lines fell 11 percent
to 25.2 million from 28.3 million a year ago.
For the quarter ended Sept. 30, AT&T's consolidated revenues
totaled $30.9 billion, compared with $31.3 billion in the year-earlier
quarter, as growth in wireless and advanced wireline data services in
large part offset declines in voice, legacy data and print advertising
products.
Overall earnings totaled 54 cents a share in the third quarter, as opposed to 55 cents a share a year earlier.
AT&T also saw U-verse TV subscribers increased by 240,000 in the third quarter to reach
1.8 million, up more than one million over the past year. AT&T
U-verse TV's broadband attach rate continues to run well above
90 percent, and its U-verse Voice attach rate continues to run above
60 percent. More than three-fourths of U-verse TV subscribers have a
triple or quad-play option from AT&T.
At the end of the third
quarter, AT&T's U-verse deployment passed more than 20 million
living units. Companywide penetration of eligible living units was
above 12 percent, and across areas marketed to for 24 months or more,
overall penetration now exceeds 20 percent. AT&T's total video
subscribers, which combine the company's U-verse and bundled satellite
customers, reached four million at the end of the third quarter,
representing 14.9 percent of households served.
"As the economy works to regain its footing, we are keenly focused on
cost improvement as well as continued leadership and investment in key
areas that will drive future growth. We have moved forward aggressively
to further expand in mobile broadband," Stephenson said. "AT&T U-verse has good
traction and is redefining our wired consumer experience. Our advanced
business products have proven to be resilient, and we continue to
expand our capabilities in areas like network security and global Wi-Fi
coverage."
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