YOU ARE AT:Archived ArticlesAT&T adds 2M customers on strength of iPhone

AT&T adds 2M customers on strength of iPhone

AT&T INC. ROLLED THROUGH the quarter with 2 million net customer additions, and most of them (1.2 million) were coveted retail postpaid customers-up more than 30% from retail postpaid gains during the same quarter of 2006.
The nation’s largest carrier also managed to cut its overall and postpaid churn rates. The company’s total churn rate dipped down to 1.7% from 1.8% in the year-ago quarter. Postpaid churn dropped from 1.5% in the third quarter of 2006 to 1.3% this year.
The company’s wireless revenues jumped more than 14% year-over-year to $10.9 billion for the quarter, with service revenues boosted by 13.7%. AT&T posted its fifth consecutive quarter of year-over-year growth in average revenue per user, with ARPU up 2% to $50.82. Wireless data revenue grew strongly, up almost 64% year-over-year; the company said that the increase was driven by “both consumer and business data usage, including messaging, media bundles, laptop connectivity, smartphone connectivity and enterprise vertical market solutions.”
“We delivered an excellent third quarter,” said AT&T Chairman and CEO Randall Stephenson.
The carrier ended the quarter with a subscriber base of 65.7 million.
Analyst Simon Flannery of Morgan Stanley noted that the positives for the company included good enterprise trends, solid wireless performance, its execution of the U-verse product offering and the fact that the company raised its free-cash-flow guidance for this year by about $1 billion. However, he noted the company is still facing pressures on wireline revenues.
AT&T now has about 11% of its customer base with 3G-equipped handsets. Analyst Michael Ounjian of Credit Suisse said the company is increasingly aggressive on its 3G plans, with footprint expansion planned for the fourth quarter. Data ARPU for 3G subscribers, Ounjian added, was almost double the regular postpaid data ARPU of about $11 and accounted for more than 30% of total ARPU.
AT&T reported that its synergies from the merger of BellSouth Corp. were ahead of the company’s expectations and that they would exceed $5 billion in 2008.

Apple contributions
Meanwhile, Apple Inc. beat Wall Street’s financial estimates and said that it sold more than 1.1 million iPhones during the quarter to bring its cumulative sales of the popular wireless device close to 1.4 million. AT&T said that more than 40% of iPhone activations were new customers.
This was the first full quarter of iPhone sales results; the company sold 270,000 units in the first day-and-a-half of results, which were reported from the quarter ending June 30. Apple reported in mid-September that it had sold its 1 millionth iPhone, 74 days after the device was released.
According to recent research from Strategy Analytics, the iPhone has become AT&T’s topselling device and accounts for about 13% of AT&T’s overall handset sales.
“The sales trajectory we are observing with the iPhone could make it the top-selling device in the U.S. over the next [one to two] quarters,” said Barry Gilbert, VP of the Strategy Analytics Buyer-TRAX programs. The company said that the iPhone is currently in place among top-selling devices.
Apple’s profits were up almost 67% year-over-year; to $904 million. Apple ended its fiscal year with $15.4 billion in cash and no debt, the company reported. The company’s revenues for the quarter totaled $6.22 billion, up from $4.84 billion in revenue for the same period in 2006.
In addition to strong iPhone sales, Apple said that its sales of Macintosh computers were up 34% from the year-ago quarter and hit a new record of about 2.2 million computers. The company’s iPod music player also continued to perform strongly, with sales of 10.2 million during the quarter, reflecting 17% year-over-year growth.
CEO Steve Jobs said that the company was “looking forward to a strong December quarter as we enter the holiday season with Apple’s best products ever.”

ABOUT AUTHOR