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Summary:

AT&T reported its second quarter earnings today, and even though its net post-paid wireless subscriber additions came out to 1.5 million, the company had fewer than expected iPhone activations on the weekend of June 30. 146,000 to be exact, not 500,000 as some had predicted. I’m […]

AT&T reported its second quarter earnings today, and even though its net post-paid wireless subscriber additions came out to 1.5 million, the company had fewer than expected iPhone activations on the weekend of June 30.

146,000 to be exact, not 500,000 as some had predicted. I’m sure we will see the real impact of iPhone sales and activations in the quarter ending September 30, 2007. The company now has 63.7 million wireless subscribers. Net income for the second quarter totaled $2.9 billion on revenues of $29.5 billion.

AT&T has 51,000 U-verse video subscribers, up from 13,000 three months earlier, while the total video connections, which include AT&T U-verse service and bundled satellite television service, went up by 200,000 in the second quarter to 1.9 million.

The bad news is in the DSL part of the business. The company added 400,000 new DSL subscribers in the quarter, down from 600,000 in the first quarter. They now have 13.3 million consumer and business high speed Internet connections. They say it is seasonal, I think it is market forces with Comcast and others being more aggressive with their bundles.

  1. We love the iPhone! For those who love Web/Tech/Geek News and comedy… Check out Episode 21 of our vLog! We think it’s pretty swell. http://digitalpunch.wordpress.com/2007/07/23/digitalpunch-episode_21/

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  2. AT&T’s problem could have something to do with systems problems after the SBC merger.

    I have changed or ordered 5 home phone lines in the past 6 months, mostly to take advantage of new pricing bundles. In every case customer service has been polite and knowledgeable about services. But they have never gotten an order right in even 2 tries.

    • Custom calling services (caller ID, etc.) ordered as bundles have been billed individually, at twice the bundled rate.
    • Line configuration is always different from what I requested. Not just little-misunderstanding different – hugely different. For each of 3 home lines it has taken 4-5 calls to configure them correctly.
    • AT&T notified me that my DSL service request had been canceled (turns out they couldn’t deliver it for weeks), then they sent me a modem for the canceled line.
    • When I requested another DSL line to replace the canceled one (!), AT&T’s order department phoned later to tell me that the number they had assigned to it was now unavailable. I called CS, and asked the agent to check again. “Oh, wait, this is strange, sir. That number is being held for…. you.”

    AT&T has been good about all this, sending me over $150 in refund checks and promising another $200 of discounts and rebates. But it can’t be easy to add lots of new lines with an order system designed by the Keystone Kops.

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  3. Their margins are ~10%? That is simply ridiculous. They will get eatin’ alive if this continues for a decade. New business model required.

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  4. [...] Tuesday, July 24, 2007 at 10:55 AM PT | No comments Apple is taking it on the chin, well because AT&T didn’t meet the inflated expectations of analysts. activations. A friend of ours emailed to point out the grand delusion of Wall Street [...]

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  5. with reference to the iPhone debacle, i think they got more bad PR and news coverage out of the launch. my sister got the phone the first day and it didn’t work for the first 24 hours. she had to go to the AT&T store and wait forever to get it fixed and she is still having problems.

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  6. Jesse Kopelman Tuesday, July 24, 2007

    It would be funny if 500,000 iPhones were sold, but only 146,000 activated . . .

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  7. [...] (minor) shifts in the overall wireless market share, according to data compiled by UBS Research. As reported earlier, iPhone resulted in 146,000 activations for AT&T, while the actual sales of the device were [...]

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