April 22nd, 2008
AT&T first quarter on target; Wireless data access revenue strong; iPhone demand solid
AT&T said Tuesday that it ended the first quarter with 71.4 million wireless subscribers and a retail churn of 1.2 percent.
The telecommunications giant detailed its wireless stats on its first quarter earnings report (statement). AT&T reported first quarter net income of $3.5 billion, or 57 cents a share, on revenue of $30.7 billion, up 6.1 percent from a year ago. Excluding charges, AT&T reported earnings of 74 cents a share, which matched estimates.
Wireless growth fueled the quarter for AT&T. The company said its wireless revenue was up 18.3 percent to $11.8 billion. Wireless data services revenue–Internet access, e-mail, messaging and data access–was up 57.3 percent from a year ago to $2.3 billion. In the quarter, AT&T’s wireless customers sent more than 620 million multimedia messages and 44 billion text messages, double year ago rates. Strong data revenues also boosted AT&T’s profit margins–the wireless unit had operating income margin of 25 percent, up from 15.2 percent from a year ago.
On a conference call, AT&T CFO Rick Lindner said that the company only has 11 million 3G devices in service. As 3G devices roll out, AT&T will have an opportunity to boost data services revenue growth. “We have great upside potential in wireless data,” said Lindner.
Lindner also had some brief comments on iPhone demand. “The iPhone continues to be popular. We continue to see customers adopt the iPhone and over 40 percent of those customers are new to us,” said Lindner, adding that trends haven’t changed much in the first quarter. He also noted that iPhone demand was stable despite anticipation of a 3G version of the device.
He outlined the following:
And the data services growth…
And a bit on the wireless roadmap…
On the economy, Lindner chose to let the current quarterly results do the talking and noted that AT&T’s business “is more defensive than most.”
By the numbers for AT&T’s other units:
- Enterprise IP data revenue–services such as Internet services, hosting and virtual private networks–was up 22.9 percent from a year ago. Enterprise revenue overall was up 1.2 percent from a year ago.
- AT&T’s broadband revenue was up 13.2 percent in the first quarter to $1.4 billion. Total broadband connections was 14.6 million, up 13.9 percent from a year ago.
- The U-Verse TV service ended the quarter with 379,000 subscribers. U-Verse gained 148,000 subscribers and AT&T reiterated that it expects to have 1 million subscribers by the end of the year.
Here’s the look at the U-Verse landscape.
Larry Dignan is Editor in Chief of ZDNet and Editorial Director of ZDNet sister site TechRepublic. See his full profile and disclosure of his industry affiliations.
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