AT&T: Mobile Broadband Revenues Lead with 27% Growth

AT&T reported Q4 2010 revenue of $31.4 billion, up $653 million, or 2.1 percent, versus the year-earlier quarter. Compared with results for the fourth quarter of 2009, operating expenses were $29.3 billion versus $26.1 billion; operating income was $2.1 billion, down from $4.6 billion; and AT&T's operating income margin was 6.7 percent, compared to 14.9 percent.


Some highlights for the quarter:


AT&T posted a net gain in total wireless subscribers of 2.8 million, to reach 95.5 million in service, the best net gain in the company's history.


AT&T added 442,000 iPad- and Android-based tablets to its network, with more than 90 percent of these booked to the prepaid category.


Retail net adds for the quarter include postpaid net adds of 400,000 and prepaid net adds of 307,000. Connected device net adds were 1.5 million, and reseller net adds were 595,000.


Postpaid churn was 1.15 percent.


There were 4.1 million iPhone activations.


Including iPhones, more than 7.4 million postpaid integrated devices were sold in the fourth quarter. (Integrated devices are handsets with QWERTY or virtual keyboards in addition to voice functionality and are a key driver of wireless data usage.)


At the end of the quarter, 61.0 percent of AT&T's 68.0 million postpaid subscribers had integrated devices, up from 46.8 percent a year earlier.


Wireless service revenues increased 9.6 percent, to $13.8 billion, in the fourth quarter. Total wireless revenues, which include equipment sales, were up 9.9 percent year over year to $15.2 billion.


Wireless data revenues — driven by messaging, Internet access, access to applications and related services — increased $1.1 billion, or 27.4 percent, from the year-earlier quarter to $4.9 billion.


AT&T U-verse TV added 246,000 subscribers to reach nearly 3 million in service. In the fourth quarter, the AT&T U-verse High Speed Internet attach rate continued to run above 90 percent, and 60 percent of subscribers took AT&T U-verse Voice. More than three-fourths of AT&T U-verse TV subscribers have a triple- or quad-play option from AT&T. ARPU for U-verse triple-play customers was more than $160.


Driven by U-verse, AT&T posted a 210,000 net gain in wireline broadband connections. About two-thirds of consumers have a broadband plan of 3 Mbps or higher.


Increased AT&T U-verse penetration drove 28.5 percent year-over-year growth in IP revenues from residential customers (broadband, U-verse TV and U-verse Voice). In the fourth quarter, AT&T U-verse revenues were $1.3 billion, 73.4 percent higher than in the fourth quarter of 2009.


In Q4, AT&T posted a decline in total consumer revenue connections due primarily to expected declines in traditional voice access lines, consistent with broader industry trends and somewhat offset by increases in U-verse TV and VoIP connections. AT&T U-verse Voice connections increased by 186,000 in the quarter and 726,000 over the past four quarters. Total consumer revenue connections at the end of the fourth quarter were 43.4 million, compared with 45.3 million at the end of the fourth quarter of 2009 and 43.7 million at the end of the third quarter of 2010.


Revenues from new-generation capabilities that lead AT&T's most advanced business solutions — including Ethernet, VPNs, hosting, IP conferencing and application services — grew 17.1 percent versus the year-earlier quarter, their strongest growth during the year, and were up 5.5 percent from the third quarter of 2010, continuing AT&T's strong trends in this category.


Total business revenues were $9.4 billion, a decline of 4.5 percent versus the year-earlier quarter, reflecting economic weakness in voice and legacy data products, and the third-quarter sale of the company's Japan assets. Business service revenues, which exclude CPE, declined 4.3 percent year over year and decreased slightly sequentially, down 1.2 percent.


Total business IP data revenues grew 9.0 percent versus the year-earlier fourth quarter, led by growth in VPN revenues. Global Enterprise Solutions IP data revenues grew 11.0 percent. More than 70 percent of AT&T's frame customers have made the transition to IP-based solutions.
http://www.att.com