January 28th, 2009
AT&T: 1.9 million iPhones activated
AT&T said Wednesday that it activated 1.9 million iPhone 3Gs in the fourth quarter with 40 percent of those activations representing new customers.
In the back half of 2008, AT&T activated more than 4.3 million iPhones (statement). AT&T also noted that it iPhone customers deliver higher revenue per user and have lower churn rates.
The news comes amid a mixed quarter for AT&T where its wireless business shined, but earnings fell a penny short of expectations. Like Verizon’s report on Tuesday, AT&T’s financial results had a little bit for everyone. The overall message, however, is that the two telecom giants–Verizon and AT&T–can weather a downturn well.
AT&T reported fourth quarter net income of $2.4 billion, or 41 cents a share, down from $3.1 billion, or 51 cents a share, a year ago. Revenue for the quarter was $31.1 billion, up 2.4 percent from a year ago. Adjusting for various charges, AT&T had earnings of 64 cents a share, a penny short of Wall Street estimates. AT&T added that its earnings were hit by its “iPhone 3G initiative,” which includes building out its network to support the iPhone.
For the year, AT&T reported net income of $12.9 billion, or $2.16 a share, on revenue of $124 billion.
In a statement, AT&T CEO Randall Stephenson said he expects “2009 to be another year of overall revenue growth and solid progress for our company.” Indeed, AT&T was able to provide a little more color on its 2009 outlook than other companies. AT&T said revenue growth in 2009 will be in the “low single-digit range” and it expects wireless profit margins to improve as the iPhone 3G matures. AT&T added that it will cut capital spending by about 10 percent to 15 percent.
By the numbers:
- AT&T had 77 million wireless subscribers, up 7 percent from a year ago. Postpaid churn was 1.2 percent and total churn for the fourth quarter was 1.6 percent.
- Wireless data revenue was $3.1 billion, up 51.2 percent from a year ago. AT&T delivered more than 80 billion wireless text messages.
- Average revenue per user was $59.59 in the fourth quarter.
- AT&T added 264,000 net U-verse TV subscribers to reach 1 million customers.
Larry Dignan is Editor in Chief of ZDNet and Smart Planet as well as Editorial Director of ZDNet sister site TechRepublic. See his full profile and disclosure of his industry affiliations.
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