ATandT Activated More iPhones Than Verizon in Second Quarter

AT&T had a strong second quarter, posting income of $3.9 billion and selling 5.1 million phones, 3.7 million of which were iPhones. The carrier talked about everything but what the industry most wants to know: when the iPhone 5 is coming.

AT&T shared the results of its fiscal second quarter July 24, ignoring a very Apple-shaped elephant.

During the quarter, company income rose 8.7 percent to $3.9 billion, and AT&T saw its highest-ever wireless margins and best ever postpaid, prepaid and total wireless churn€”aka, customers stayed put. It added 320,000 postpaid contract customers and 1.3 million total wireless customers, activated 219,000 tablets and sold 5.1 million smartphones, 3.7 million of which were iPhones. Of those iPhones, 22 percent went to customers new to AT&T.

One-third of its postpaid subscribers, said AT&T chief financial officer John Stephens, are now on 4G-capable phones, and it now has 47 Long-Term Evolution (LTE) markets.

What Stephens and his colleagues wouldn't share was what the industry, and well beyond, wants to know: When is the next iPhone coming?

Analysts were left with their suspicions€”an October release of the iPhone 5 is the most common guess€”and how those reflect on whether customers are holding off on upgrades.

This same quarter a year ago€”likewise with expectations of a new iPhone looming ahead€”AT&T activated 3.6 million iPhones, with 24 percent to new subscribers, and sold 5.6 million total smartphones.

Verizon Wireless, which reported its most recent quarterly earnings July 19, sold 5.9 million smartphones during its second quarter, 2.7 million of which were iPhones. A year ago, it activated 2.2 million iPhones during its second quarter.

What AT&T executives preferred to focus on during the call were AT&T's strong mobile Internet growth, strong U-verse growth (U-verse revenue grew 38.3 percent from a year ago), strategic business services€”enterprise revenue grew for the first time in more than four years€”and its pricing plans.

"All in all, it was a great quarter that puts us into a strong position going into the rest of the year," said Stephens.

Stephens added that AT&T sold more iPhones during the quarter than "the other network," and that those customers "are choosing AT&T for a reason."

Its tiered data plans, now two years old, are in good shape, said Stephens. "Customers are choosing the higher-tiered plans at a clip of more than 70 percent."

Like Verizon, AT&T recently introduced shared data plans, which Stephens said are also being well-received, and which AT&T believes "will drive more customers onto our network."

Suggesting a strong future for the bucket-oriented share-data plans, AT&T said that its average revenue per user for smartphones is twice that of non-smartphone customers, that 88 percent of its smartphone subscribers are on FamilyTalk or business plans€”plans involving more than one person, and so increasing the hassle of changing plans€”and that churn for these plans is significantly lower than for other postpaid subscribers.

"Our mobile Internet leadership continues, with solid gains in smartphones and tablets, plus our wireless margins have never been better," AT&T CEO Randall Stephenson said in a statement.

"Most impressive," added Stephenson, with this growth, we also achieved our best-ever postpaid wireless churn, which points to the premier experience customers receive on our network. All these things add to our confidence and enthusiasm looking ahead."