AT&T added 2.0 million increase in total wireless subscribers in Q3 2009 to reach a total wireless customer base of 81.6 million, up 6.7 million over the past year. AT&T added 4.3 million postpaid 3G integrated wireless devices, the largest quarterly increase in the company's history. This included 3.2 million iPhone activations, also the company's largest quarterly total to date.
Third-quarter revenues totaled $30.9 billion, net income attributable to AT&T was $3.2 billion, diluted earnings per share totaled $0.54 and cash from operating activities totaled $9.7 billion.
The company said its ongoing cost controls, strong wireless gains, further expansion of AT&T U-verse services and continued double-digit growth in revenues from strategic business products offset declines in voice, legacy data and print advertising products. Versus the second quarter of this year, consolidated revenues were up 0.4 percent, marking the company's second consecutive quarter with a sequential revenue increase. Consistent with results in the third quarter and year to date, AT&T expects consolidated revenues for the full year 2009 will be slightly below 2008 results.
Some highlights of the Q3 quarterly report:
Wireless
- Retail postpaid net adds totaled 1.4 million -- the second highest third-quarter total in the company's history, behind only the third quarter of 2008, which included a strong iPhone 3G launch -- and were up 20.1 percent versus results in the second quarter of this year.
- Total wireless average monthly subscriber churn reached a record low of 1.43 percent, down from 1.69 percent in the year-earlier quarter. Postpaid churn improved from 1.22 percent in the year-earlier quarter to 1.17 percent.
- Over the past year, the number of postpaid integrated devices on AT&T's network more than doubled, and at the end of the third quarter, 41.7 percent of AT&T's 63.4 million postpaid subscribers had integrated devices. The average ARPU for integrated devices on AT&T's network continues to be 1.8 times that of the company's nonintegrated-device base.
- Forty percent of iPhone activations are new customers for AT&T.
- Wireless data revenues -- from messaging, Internet access, access to applications and related services -- increased $916 million, or 33.6 percent, from the year-earlier third quarter to $3.6 billion, more than double the company's total in the third quarter two years earlier.
- Data represented 29.4 percent of AT&T's third-quarter wireless service revenues, up from 24.2 percent in the year-earlier quarter and 18.4 percent in the third quarter of 2007.
- Wireless text messages on the AT&T network exceeded 120 billion, nearly double the total for the year-earlier quarter.
- ARPU increased 3.8 percent versus the year-earlier quarter to $61.23. This compares with 2.3 percent year-over-year growth in the second quarter of this year and marks the seventh consecutive quarter AT&T has posted a year-over-year increase in postpaid ARPU. On a sequential basis, postpaid ARPU was up 1.7 percent. Postpaid data ARPU reached $18.37, up 25.0 percent versus the year-earlier quarter and up 3.7 percent sequentially.
- 2009 wireless network initiatives include adding about 2,000 new cell sites; adding about 100,000 new circuits for backhaul -- doubling number of fiber-served cell sites; expanding 3G to about 4,400 sites, covering more than 370 markets by end of year; completing the 850 MHz spectrum conversion to 3G; and increasing Wi-Fi connections up 4X over 3Q08 -- >20,000 U.S. hotspots, 125,000 globally.
Wireline
- AT&T U-verse TV subscribers increased by 240,000 -- versus a net gain of 232,000 in the year-earlier third quarter -- to reach 1.8 million, up more than 1.0 million over the past year.
- At the end of the third quarter, AT&T's U-verse deployment passed more than 20 million living units. Companywide penetration of eligible living units was above 12 percent, and across areas marketed to for 24 months or more, overall penetration now exceeds 20 percent.
- AT&T U-verse broadband had a net subscriber gain of 252,000 subscribers, offseting declines in traditional DSL connections for a 90,000 net gain in wireline broadband connections. Total broadband connections, which include wireline subscribers and wireless customers with 3G LaptopConnect cards, increased by 138,000 in the quarter to reach 17.1 million.
- Broadband, U-verse TV and U-verse Voice now represent 32.4 percent of AT&T's consumer wireline revenues, up from 23.2 percent in the year-earlier third quarter and 18.7 percent in the third quarter of 2007.
- AT&T had 45.7 million total consumer revenue connections at the end of the third quarter, compared with 46.3 million at the end of the second quarter of 2009 and 47.5 million at the end of the third quarter of 2008, reflecting declines in traditional voice access lines partially offset by increases in broadband, TV and VoIP connections.
- Revenues from new-generation Ethernet, VPNs, hosting, IP conferencing and application services grew 16.6 percent versus the year-earlier third quarter and were up 5.2 percent sequentially.
- Business IP data revenues grew 6.8 percent versus the year-earlier third quarter and were up 3.1 percent sequentially. This compares with 5.8 percent year-over-year growth and a slight sequential decline in the second quarter of this year.
- AT&T's IP data gains continue to be led by high-teens percentage growth in VPN revenues. More than 60 percent of AT&T's frame customers have made the transition to IP-based solutions, which allow them to easily add managed services such as network security, hosting and IP conferencing on top of their infrastructures. In the third quarter of 2009, IP revenues represented 31.7 percent of AT&T's total business data revenues, up from 29.3 percent in the year-earlier quarter and 26.1 percent in the third quarter of 2007.
