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    ATandT Posts a Quarter for the Record Books

    Written by

    Michelle Maisto
    Published October 21, 2010
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      AT&T’s pending loss of exclusive U.S. rights to the Apple iPhone will likely be a low day for the carrier. But no matter. For now the provider of the iPhone 4, which has gradually put together a diverse mobile portfolio that now includes every major mobile operating system, is riding high.

      The carrier on Oct. 21 announced third-quarter revenues of $31.6 billion for the quarter and an increase of 2.6 million wireless subscribers, bringing its total to 92.8 million.

      “We had a tremendous wireless growth quarter. Everything we could hope for and more,” Ralph de la Vega, AT&T president and CEO, said during a conference call with media and analysts. “The word you’ll keep hearing again and again is ‘record.’ Record sales of integrated devices, record gross adds, record customer upgrades, record third-quarter net adds of $2.6 million, record wireless data sales. We also had the best-ever third-quarter total churn. Our seventh consecutive quarter of growth in post-paid ARPU (average revenue per user), and we added 1.2 million connected devices during the third quarter, setting the pace for the industry.”

      De la Vega said the company is “just scratching the surface,” adding that AT&T sees new growth opportunities with integrated devices and believes emerging wireless devices are just beginning to take off.

      Devices, however, are only as good as the network supporting them-just ask any iPhone owner-and so a good portion of the call was focused on AT&T’s plans for upgrading its network from HSPA 7.2 to HSPA+ over the next six to 12 months and then, in 2011, to LTE (long-term evolution), its 4G technology of choice.

      At one point, de la Vega and AT&T CFO Rick Lindner more or less sidestepped an analyst question about whether, once AT&T is no longer the exclusive provider of the Apple iPhone, its Droid users may begin to outnumber its iPhone users. The analyst followed, “Is churn on the iPhone going to be dictated by network speed?” The implication was that consumers are more likely to choose an iPhone on the highly reputed Verizon network over the often-maligned AT&T.

      “The real story here is, this quarter, with as large of a post-paid base as we have, well over 80 percent of the devices we sold … were integrated devices,” said Lindner. “That’s astounding. And it’s huge compared to even where we were just a year ago. [It] speaks to a combination of the features in these devices, along with the network speeds.”

      He then used the question as an opportunity to talk up not just AT&T’s forthcoming 4G network but its boosted 3G network.

      As the smartphones being developed today will require mobile broadband speeds, soon all the carriers will roll out 4G networks, Lindner explained. However AT&T, as it completes its three-steps, will have an opportunity to offer “a superior experience on these devices” that won’t only be about the speed of its 4G network, Lindner said.

      “Eventually, these 4G networks are going to cover a relatively small piece of geography,” he went on. “On our network, [customers are] going to have a great experience on LTE, but as they move off of that geography, they’re going to have a very, very good experience on HSPA+ … versus other carriers, where you will see a significant decrease in speeds when you’re out of their 4G footprint area.”

      Verizon Wireless, as it seemingly prepares to offer the iPhone, is expected to begin offering tiered pricing Oct. 28, according to the Wall Street Journal. While AT&T recently did away with its unlimited data plan, Verizon will reportedly offer one-for $29.99-which has led some to wonder whether AT&T will feel pressured to reverse its decision.

      Lindner, while saying it was “difficult to comment on competitor prices,” said he was glad to see spectrum being treated as a valuable resource and AT&T’s competitors offering their customers a choice. “That’s consistent with our view,” said Lindner.

      Verizon Wireless will announce the results of its fiscal third quarter Oct. 22.

      Michelle Maisto
      Michelle Maisto
      Michelle Maisto has been covering the enterprise mobility space for a decade, beginning with Knowledge Management, Field Force Automation and eCRM, and most recently as the editor-in-chief of Mobile Enterprise magazine. She earned an MFA in nonfiction writing from Columbia University.

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