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Summary:

AT&T’s said today its wireless division grew to account for 45 percent of revenues in the first quarter. Indeed, the carrier is betting big on wireless through the sale of phones with data plans and an emphasis on providing wireless connectivity for the Internet of things.

AT&T today reported first-quarter earnings of $2.5 billion and sales that were largely unchanged from the year before, at $30.6 billion — but the flat sales mask the gains made in its wireless business, which grew to account for 45 percent of revenues. In short, AT&T is betting big on wireless through the sale of phones with data plans (it added 1.9 million wireless subscribers), prepaid plans and an emphasis on providing wireless connectivity for the Internet of things.

For example, the carrier has a deal to provide connectivity for the Kindle and one with Jasper Wireless to help it provide wireless connectivity for myriad partners. I’ve spoken with Glenn Lurie, the executive in charge of At&T’s machine-to-machine efforts, who was optimistic that margins would be higher in emerging devices such as the pictured photo frame. Earlier this year AT&T said it was providing connectivity to everything from dog collars that broadcast a pet’s location to pill bottles that will remind you to take your meds (and even tell on you if you don’t).

The irony here is that M2M connectivity in many ways represents the dumb pipe future that AT&T is so worried about — it’s not providing anything to its partners but the bits. On the call, AT&T executives explained that the number of bits sent via the network are high-margin bits and the machine-to-machine clients have very low churn. Total wireless operating margin rose for the carrier to 44.5 percent.

AT&T also said it had improved its wireless network (GigaOM Pro sub req’d) in New York and that dropped calls in the region declined by 6 percent. For everyone on the wireless network, AT&T said  its HSPA network upgrades are boosting download speeds by 32-47 percent in places where AT&T has deployed fiber backhaul.  Readers, has your AT&T experience improved? Let us know in the comments.

  1. As a long time AT&T mobile customer, I have had very little issues with coverage.

    Where AT&T really drops the ball is the lack of a seamless customer experience for those of us who use multiple AT&T services. AT&T continues to silo customer service by product offering and this creates a disjointed experience for what should be their highest value customer.

    We all know, customer service is the new sales channel. Too bad AT&T doesn’t.

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  2. Longtime AT&T customer here too. I’ve personally (family) got 3 AT&T wireless phones, the only one that drops calls and gets bad reception is the iPhone, Blackberries are rock solid.
    The company I work for just went through an RFI that included CDN and Wireless (amongst other things). Moreso than any other vendor, they had a single contact point and a consolidated plan, which a pleasant surprise and in contrast to the comment from Mr. Vernon (above). Furthermore, we had some wireless billing stuff that after months trying to clear, the point person who was working the RFI was able to bring in the right people from Wireless Billing-A/P and we had it fixed in 3 days with a credit coming. I guess the point it that as long as you have the right contact point, the consolidated services plan seems to be pretty sweet. Somewhat related, Gomez times on their CDN was the fastest for domestic (USA) bits (over Akam and LLNW) which was hugely surprising, particularly as it was also the least expensive, but speaks to unified connectivity.. if they are connecting all these disparate dots, makes sense that they can deliver bits fastest as so many start and endpoints are on-net so to speak. Hope this works, I don’t want to have to re-architect our bit distribution platforms.

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  3. I’m in the Dallas/Ft Worth market, and we’re supposed to be one of the first markets to see the HSPA upgrade. So far, I have not seen any speed boosts at all. However, the 3.2 service has been great. I can easily get 2.5mbps down/275kbps up, and do not have a problem with dropped calls.

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  4. It is amazing what can happen when you look for new opportunitites to increase traffic as opposed to milking the infrastructure and subsequently customers. Maybe there is hope for US carriers. Personally while I have plenty of issues with Apple, prior to the iPhone the US was trolling in third-world waters.

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  5. [...] Zobacz resztę artykułu: AT&T Bets Big on the Internet of Things [...]

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  6. On Kauai island iPhone & 3G wireless Sierra dongle. Makes a Consistent HSPA connection to tower. Don’t know speed but works for video/podcast downloads. I’ve never had occasion to speak to a human at ATT everything works seamless. Very pleased.

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  7. In densely-populated areas of Dallas, enabling 3G on an ATT phone = dropped calls. Never a problem with Sprint or Verizon. I just leave 3G disabled for ATT as EDGE still seems “fast enough” and battery life is better.

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  8. Terry Taylor Sunday, April 25, 2010

    Just today, I had 3 30min+ phone calls on my iphone and each call had 3-4 drops. It’s a daily occurrence. I rarely get thru a call without a drop.

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  9. AT&T’s first quarter earnings highlights the progression of the ‘Internet of Things’. The concept represents the next significant step in the internet revolution, with social media titan Twitter showing impressive initiative alongside several powerful and prominent brands. As the internet matures and expands to include objects (“The Internet of Things”) on a wide-scale, its full potential will be realized. As objects have the potential to communicate with one another in real-time, ultimate efficiency is achieved. The savings in costs, resources and time will be unprecedented.

    The benefits this extends to manufacturing, Defense, Retail, Healthcare, Banking and others industries will be world-changing and the way we go about our duties will never be the same.

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  10. Stacey,
    This has been driven by the iPhone, which forced AT&T to check their data connectivity around the US and optimize the network. I think they are now viewing mobile data as more than just being a pipe for bits, as the pipes here need to be optimized.
    Tsahi

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  11. A bit of self promotion here, but thought I’d share a recent Internet of Things video we did: http://www.youtube.com/watch?v=sfEbMV295Kk

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  12. [...] why AT&T is betting big on the Internet of things, providing service for the Kindle, pill bottles and dog collars. It’s why Verizon has a joint [...]

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  13. At&T is apparently deliberately stopping service for several hours each day for it’s own reasons and purposes. This of course constitutes the taking of the customer’s fees and payments while not actually providing the services called for under their contracts. There is a word for this under the law ….. I personally am dumping them. This has gone on for over a month.

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  14. [...] has more than doubled its connected devices from 3.3 million to 7.8 million which is why it’s betting big on this market. The next battleground isn’t in your pocket or your briefcase, but in the home connecting [...]

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  15. [...] number of cellular connections is projected to reach 4.0 percent. “In Q1-2011, we expect that AT&T will become the first mobile operator to reach 10 million M2M subscribers after more than doubling the installed base in the past 12 [...]

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  16. [...] Fantastic profits and a chance to keep growing subscriptions? No wonder AT&T and other operators are betting on the Internet of Things. [...]

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