ATandT Reaches 85.1 Million Subscribers, On Track for LTE

AT&T announced a quarterly income of $3 billion for the quarter, as well as its best year for new customers, bringing its total subscribers to 85.1 million. Despite complaints about poor service in some cities, iPhone customers held on, and the carrier achieved its best-ever churn levels during the quarter.

AT&T's fiscal fourth quarter for 2009 was a strong one, with the carrier adding new wireless subscribers thanks to the strength of the iPhone and posting $3 billion in quarterly income.

AT&T added 2.7 million wireless subscribers during the quarter - the second-highest in the company's history - and for the full year, saw the company's best-ever total of 7.3 million additions, for an overall 85.1 million subscribers. The company also achieved its best-ever wireless subscriber churn levels during the quarter.

However, given the difficult economic climate, AT&T's 2009 totals were behind the numbers it posted during the same time in 2008.
For the fourth quarter, which ended Dec. 31, AT&T's consolidated revenues totaled $30.9 billion, compared to $31.1 billion a year earlier. However, the company's net income was $3 billion, up from $2.4 billion a year earlier. For the year, however, AT&T saw a net income of $12.5 billion, which was down from 2008's $12.9 billion.
"We had a solid 2009 and led the industry in the biggest growth driver - mobile broadband," Randall Stephenson, AT&T's chairman and CEO said in a Jan. 28 statement. "Looking ahead, customer demand for connectivity, particularly mobile broadband and IP data, continues to be strong and AT&T is well positioned at the center of this growth. Our fundamental outlook for the business is quite positive."
In regard to looking ahead, this year AT&T could face the end of its status as the exclusive U.S. provider of Apple's iPhone, though the exact end-date of its contract is a rather well-guarded secret. While AT&T and Apple maintain that they have a good working relationship, many analysts believe Verizon Wireless will eventually carry its own version of the iPhone.

However, Gartner analyst Alex Winogradoff told eWEEK, "The fact that the iPad is again exclusive to AT&T [offers] a strong sense that the iPhone contract will remain with AT&T exclusively through 2010."

In regard to the contract's end arriving, Winogradoff added, "Obviously, AT&T on the other hand, would be prepared to deal with the contract lapsing - and it's impact on the bottom line would not even be noticed, because a data contract runs for two years anyway - while it will negatively affect the growth rate of data revenues (slower than if the iPhone were exclusive) net-net it will not impact bottom line in any significant way."

Also looking ahead, AT&T, in its efforts to continue building out its mobile broadband offerings, has also asked the Federal Communications Commission (FCC) to allow it to unburden itself of its landline business. And additionally,it has filed a settlement regarding early termination fees and alerted customers on Jan. 27 that it was willing to hand over $18 million to smooth over the matter.
Looking back, however, AT&T reported that it expanded its 3G coverage area by 4,100 sites, or 360 cities - which should add a few more dots to those contested Verizon Wireless maps. It additionally lowered its 3G dropped-call rate by 22 percent, from 1.16 percent in Dec. 2008 to 1.08 in Nov. 2009 and 0.91 in December.
In San Francisco and New York, two cities where AT&T has acknowledged having some difficulties, it reported improving its 3G Voice Composite Quality Index. In San Francisco in particular, it achieved a 21 percent improvement during the quarter.
As it plans to support 4G, LTE technology, the carrier said LTE testing was already underway, and that it was nearing the vendor-selection process. Already, it said, it offers 10 HSPA 7.2-enabled devices - including the iPhone 3GS - which are backward-compatible and will be able to take advantage of the network's upcoming higher speeds.
"Our significant investments in IP infrastructure - both mobile and fixed - provide the next-generation growth platforms for us," said Stephenson. "Our leadership in mobile broadband will continue to set us apart as we roll out even faster 3G speeds this year and begin deploying 4G capabilities in 2011."
Stephenson added, "Our IP-based U-verse service continues to scale nicely, improving our consumer revenue profile. And we continue to see solid growth from mobile broadband and IP data services in the business segment."