AT&T is Sitting Pretty with iPhone and U-verse

AT&T reported a slight boost in profits this morning, and the carrier has quite a bit to boast about, especially on the wireless side. iPhone activations reached 2.4 million during the third quarter, and 40 percent of those iPhones were sold to new subscribers who activated on the AT&T network. And despite what analysts say, AT&T also seems on track to reach 1 million U-verse subscribers by the end of the year, gaining 232,000 subscribers this quarter for a total of 781,000 signed up at the end of September.
Total revenue for the carrier was $31.34 billion, up from $30.13 billion the same period last year. That led to profits of $3.23 billion for the quarter, up from $3.06 billion from the third quarter of 2007. AT&T should retain its wireless lead with 74.9 million subscribers after gaining 2 million during the quarter. We’ll have to see how many Verizon added to the 68.7 million it had at the close of June, when it reports earnings on Oct. 27.
For the first time, AT&T (s T) also broke out the total number of wireless and wireline broadband subscriptions, signaling the growing importance of wireless broadband data. Total broadband-capable connections increased by 2.9 million in the third quarter to reach 20.7 million. Since the iPhone data plans count as a broadband subscription, many of those adds look to be iPhone related. Wireless data revenue was up by 50 percent from the third quarter of last year at $2.7 billion and accounted for 24 percent of total wireless services revenue. Postpaid annual revenue per user (ARPU) on the wireless side was $58.99.
AT&T earlier this month reorganized its business into consumer and business related segments as opposed to wireline and wireless, but still reported wireless and wireline sales separately for the quarter. The carrier is watching its landlines and DSL lines erode further, but U-verse subscriptions are taking up some of the slack on the wireline side. IP traffic is continuing to increase as part of the wireline business, with 44 percent of AT&T’s sales coming from IP services such as broadband, rather than analog phones. AT&T should welcome the digital — and data driven — future.