AT&T Mobility posts iPhone-fueled growth during Q2: Hot-selling device pressures margins

AT&T Mobility continues to ride the iPhone tide as the nation’s second largest operator posted strong customer growth during the second quarter bolstered by Apple Inc.’s device.
The carrier, which prior to Verizon Wireless’ closing of its acquisition of Alltel was the industry’s No. 1 carrier, said it added 1.368 million customers during the quarter, including 1.153 million postpaid net adds. The carrier added that more than 2.4 million iPhone’s were activated on its network during the quarter, which included the launch of the latest 3GS models. The carrier ended the quarter with 79.6 million customers on its network.
Helping propel the strong customer growth was a drop in customer churn from 1.64% during the second quarter of 2008 to 1.49% this year. Data revenues surged 26% year-over-year to $14.57 per customer during the quarter, which helped maintain average revenue per user for the quarter at just under $51.
Wireless revenues were up 10% year-over-year to $12 billion for the quarter, and $23.6 billion for the first half of the year. Operating margins came in light than expected at 38.3% for the quarter, which was attributed to greater than expected iPhone sales and the accompanying costs of device subsidies. The carrier said it expects margins for the year to be around 40%.