7 Comments

Summary:

Sprint’s loss has certainly been AT&T’s gain. The San Antonio, Texas-based carrier reported its fourth-quarter results this morning, saying its profits more than doubled to $3.14 billion thanks to strong wireless growth that helped push sales to $30.3 billion. AT&T (T) saw its wireless revenue hit […]

Sprint’s loss has certainly been AT&T’s gain. The San Antonio, Texas-based carrier reported its fourth-quarter results this morning, saying its profits more than doubled to $3.14 billion thanks to strong wireless growth that helped push sales to $30.3 billion.

AT&T (T) saw its wireless revenue hit $11.4 billion in the latest three-month period, driven primarily by data use and new customer adds — the number of wireless subscribers totaled 70.1 million by the end of the qaurter. Much of the credit for the $2 billion in wireless data revenue goes to the iPhone, as 40 percent of those buying iPhones are new AT&T customers. Smart phone subscribers, including the iPhone buyers, also tend to have double the ARPU of AT&T’s average wireless user.


In total AT&T added 2.7 million new wireless subscribers during the fourth quarter. But for those tempted to credit all of AT&T’s success in wireless data to the iPhone, consider that 9 million smart phones and devices are using AT&T’s 3G network, rather than the 2.5G EDGE network on which the 2.3 million AT&T iPhones run.

In other high-end services, AT&T saw its U-Verse subscribers almost double over the third quarter, to 231,000 from 126,000. Speaking on the conference call, AT&T CFO Rick Linder said the churn on U-Verse is comparable to churn rates for the company overall, but said he expects that number to level out at about 2 percent in the coming year. The U-Verse platform includes high-speed data and video services.

Broadband growth slowed in the fourth quarter, with 396,000 new customer adds compared with 499,000 for the third quarter. For the full-year 2007 period, 14.2 million customers received service, up 16.4 percent from from a year ago. However, revenue from those services were up only 13.7 percent year-over-year, at $1.4 billion. The economic weakness that’s expected in the coming year will likely continue to cause slower broadband adoption, Linder said in the conference call.

It may also cause a few hangups in the company’s wireline voice services as customers stop paying their bills. Although Linder said he expected wireless to be a defensive service through any economic turmoil, I do think revenue associated with media packages and downloads might dip. While businesses may pay for smart phones, if it comes down to paying AT&T or paying rent, I’m sure some of the consumer users might start to question their data plans.

You’re subscribed! If you like, you can update your settings

By Stacey Higginbotham

You're subscribed! If you like, you can update your settings

  1. Good analysis.

  2. All information » Wireless Growth Drives AT&T Profit Thursday, January 24, 2008

    [...] post by Stacey Higginbotham This entry is filed under Uncategorized. You can follow any responses to this entry through the [...]

  3. Mobile Web Has a Long Way to Grow « BIG Interactive Wednesday, March 19, 2008

    [...] $5 and $15 in ARPU for the carriers deploying the Novarra software. One only needs to look at AT&T’s recent profits, which were driven by wireless growth, to realize that pushing easier access to the Internet for [...]

  4. AT&T Earnings and U-Verse Update – GigaOM Tuesday, April 22, 2008

    [...] with income of $3.5 billion on sales of $30.7 billion for the first quarter. Like last quarter, wireless revenue drove growth, but U-Verse data looked pretty good too. As Om wrote yesterday, AT&T affirmed that it’s [...]

  5. AT&T Earnings and U-Verse Update – GigaOM Tuesday, April 22, 2008

    [...] with income of $3.5 billion on sales of $30.7 billion for the first quarter. Like last quarter, wireless revenue drove growth, but U-Verse data looked pretty good too. As Om wrote yesterday, AT&T affirmed that it’s [...]

  6. AT&T Earnings and U-Verse Update – GigaOM Tuesday, April 22, 2008

    [...] with income of $3.5 billion on sales of $30.7 billion for the first quarter. Like last quarter, wireless revenue drove growth, but U-Verse data looked pretty good too. As Om wrote yesterday, AT&T affirmed that it’s [...]

Comments have been disabled for this post