Record iPhone activations propel AT&T’s Q2 results

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AT&T Mobility said it activated a record 3.2 million Apple Inc. iPhones on its network during the recently completed second quarter that included only about a week worth of the latest iPhone 4 sales. The strong activations helped push the industry’s No. 2 carrier to 1.562 million net customer additions during the quarter and ending the first half of the year with 90.130 million devices on its network.

The carrier’s customer growth was a 14.2% increase compared with the second quarter of 2009 and included 496,000 postpaid customer additions, 300,000 prepaid additions and 896,000 “net connected device” additions. Postpaid growth was down significantly from the more than 1.1 million customers added in 2009, while prepaid growth was up from a loss of 412,000 customers a year ago and connected devices surged from 304,000 additions during the second quarter of 2009.
Helping bolster this growth was a drop in customer churn from 1.48% during the second quarter of 2009 to a company record-low 1.29% this year.
AT&T Mobility noted that 27% of iPhone activations during the quarter were for customers new to its network and that 53.2% of its postpaid customer base were using what it termed “integrated” devices, meaning either smart phones or a device with a QWERTY keyboard.
AT&T Mobility said it ended the first half of this year with 67 million direct postpaid customers, 5.9 million direct prepaid customers and 6.7 million net connected devices on its network.
Postpaid average revenue per user jumped 3.4% year-over-year to $62.63 with data services contributing $21.07 to the total, an 18.6% increase compared with the second quarter of 2009.
Wireless revenues including services and equipment increased 7.7% year-over-year to $14.2 billion for the second quarter with expenses increasing just over 2% to $10.14 billion. The carrier added that it increased wireless capital expenditures by nearly 60% year-over-year.
AT&T Mobility’s operating revenues accounted for 42.8% and largest segment percentage of AT&T’s total for the quarter.
The carrier’s parent company AT&T Inc. also said it was updating full-year guidance from its previous “stable-to-improved” forecasts for earnings per share and consolidated operating income margins to “strong” EPS results and “improved” consolidated operating income margins, with free cash flow now expected to be above 2008 levels from previous guidance of inline with those results.
AT&T’s stock was trading up more than 2% early Thursday at $25.54 per share.
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