Blog Post

AT&T: Verizon Hasn’t Dented Our iPhone Business

Verizon may be picking up a good number of iPhone users since launching the product earlier this year (we’ll have a better idea of how many tomorrow when Verizon posts its results) but, for now, that force is not necessarily impacting AT&T (NYSE: T) as badly as it could be: today the carrier reported a record number of wireless subscriber additions, more than 10 percent revenue growth, and — pointedly — iPhone subscriber churn unchanged compared to the same quarter last year.

Some of the highlights from today’s quarterly earnings:

Lots of “best-ever” claims in the company’s top-line earnings release, including Q1 increase in total wireless subscribers, which were up 2 million for a total of 97.5 million subscribers, with increases in prepaid, postpaid, and smartphone users; record Q1 smartphone sales of more than 5.5 million; and “best-ever” Q1 connected device net adds, at 1.3 million.

iPhone. iPhone activations grew by 1 million compared to last year. They were 3.6 million for the quarter, and 23 percent of those subscribers were new to AT&T.

— Wireless data. AT&T is seeing growth very comparable with the rest of the world’s big mobile operators in developed markets. These were up by 23.9 percent, which works out to revenues of $1 billion compared to the same quarter one year ago.

Tablets. These are also showing strong growth, as befits an emerging product area. These are not broken out in the top-line earnings, but AT&T notes that “branded computing subscribers” (which includes tablets, aircards and other data-only devices) grew by 421,000, double the rate Q1 a year ago. Total number of such subscribers are now 3.4 million.

These numbers bode well for AT&T but may ironically help push arguments from competitors like Sprint (NYSE: S) who believe that AT&T’s proposed acquisition of T-Mobile USA will make it too-strong a player in the U.S. mobile market.