Robust mobile broadband growth underpinned AT&T's financial performance in Q1, as the company posted consolidated revenues of $31.2 billion, up more than $700 million, or 2.3 percent, versus the year-earlier quarter, marking the company's fifth consecutive quarter with a year-over-year revenue increase.
First-quarter 2011 net income attributable to AT&T totaled $3.4 billion, or $0.57 per diluted share. These results compare with reported net income attributable to AT&T of $2.5 billion, or $0.41 per diluted share, in the first quarter of 2010. Excluding 2010 significant items, earnings per share for the first quarter of 2011 was stable with earnings per share of $0.58 per diluted share in the year-ago first quarter.
"We delivered another robust mobile broadband growth quarter for a very solid start to the year," said Randall Stephenson, AT&T chairman and chief executive officer. "We posted double-digit wireless revenue growth, and we set new first-quarter records in total net adds, connected device net adds and smartphone sales. Growth in tablets and other branded computing subscribers also continues to be strong.
"Mobile broadband networks are driving unprecedented growth and innovation, and AT&T is playing a leading role in bringing these benefits to customers," Stephenson said. "That's why our agreement to acquire T-Mobile USA, which we announced in March, is so important. Combined, the two companies' spectrum and network assets will allow us to simultaneously address spectrum issues created by this increased demand and improve customers' network experience as volumes continue to grow."
Some highlight from the company's quarterly report:
AT&T posted a net gain in total wireless subscribers of 2.0 million, to reach 97.5 million in service.
Retail net adds for the quarter include postpaid net adds of 62,000. Excluding the impacts of the Alltel and Centennial integration migrations, postpaid net adds were approximately 165,000. Prepaid net adds were 85,000.
More than 5.5 million smartphones were sold in the first quarter, the third-highest quarter ever and an increase of more than 60 percent year over year.
3.6 million iPhones were activated. Approximately 65 percent of postpaid sales were smartphones.
At the end of the quarter, 46.2 percent of AT&T's 68.1 million postpaid subscribers had smartphones, up from 34.7 percent a year earlier.
The average ARPU for smartphones on AT&T's network is 1.8 times that of the company's other devices. More than 80 percent of smartphone subscribers are on FamilyTalk and/or business discount plans. Churn levels for these subscribers are significantly lower than for other postpaid subscribers.
Connected device net adds were 1.3 million, and reseller net adds were 561,000.
The first LTE services are on-track for launch later this year.
Wireless churn was 1.36 percent versus 1.30 percent in the first quarter of 2010 and 1.32 percent in the fourth quarter of 2010. Postpaid churn was 1.18 percent, compared to 1.07 percent in the year-ago first quarter and 1.15 percent in the fourth quarter of 2010. Excluding the impacts of the Alltel and Centennial migrations, postpaid churn was 1.12 percent for the quarter, compared with 1.05 percent in the year-ago quarter and 1.10 percent in the fourth quarter of 2010.
Double-Digit Wireless Revenue Growth. Total wireless revenues, which include equipment sales, were up 10.2 percent year over year to $15.3 billion. Wireless service revenues increased 8.6 percent, to $14.0 billion, in the first quarter.
Wireless data revenues — driven by messaging, Internet access, access to applications and related services — increased nearly $1 billion, or 23.9 percent, from the year-earlier quarter to $5.1 billion.
AT&T postpaid wireless subscribers on monthly data plans increased by 18.7 percent over the past year. Versus the year-earlier quarter, total text messages carried on the AT&T network increased by more than 25 percent to 179.8 billion, and multimedia messages increased by 54.2 percent to 3.7 billion.
WirelineRevenue from residential customers totaled $5.3 billion in the first quarter, up 0.5 percent year over year, the third consecutive quarter of year-over-year growth.
AT&T U-verse TV added 218,000 subscribers to reach 3.2 million in service. In the first quarter, the AT&T U-verse High Speed Internet attach rate continued to run above 90 percent and nearly 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 $168, up 14.3 percent year over year.
AT&T's U-verse deployment now reaches 28 million living units. Companywide penetration of eligible living units is 15.3 percent, and across areas marketed to for 30 months or more, overall penetration is 23.8 percent.
AT&T's total video subscribers, which combine the company's U-verse and bundled satellite customers, reached 5.1 million at the end of the quarter, representing 20.6 percent of households served.
AT&T posted a 175,000 net gain in wireline broadband connections. About two-thirds of consumers have a broadband plan of 3 Mbps or higher.
AT&T U-verse penetration and a significant number of subscribers on triple- or quad-play options drove 26.1 percent year-over-year growth in IP revenues from residential customers (broadband, U-verse TV and U-verse Voice). IP revenues now represent 46.9 percent of total wireline consumer revenue, up from 37.4 percent in the first quarter of 2010.
Wireline revenues per household served increased 6.5 percent versus the year-earlier first quarter and were up 1.4 percent sequentially (average revenue per household is total consumer wireline revenue divided by the average monthly households in service), driven by AT&T U-verse services. This marked AT&T's 13th consecutive quarter with year-over-year growth in wireline consumer revenues per household.
In the first quarter, 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, broadband and VoIP connections.
AT&T U-verse Voice connections increased by 181,000 in the quarter and 716,000 over the past four quarters. Total consumer revenue connections at the end of the first quarter were 43.1 million, compared with 45.0 million at the end of the first quarter of 2010 and 43.4 million at the end of the fourth quarter of 2010.
Total business revenues were $9.3 billion, a decline of 4.5 percent versus the year-earlier quarter and down 2.0 percent sequentially, reflecting economic weakness in voice and legacy data products and the third-quarter 2010 sale of the company's Japan assets. When normalized for the Japan sale, total business revenues declined 3.6 percent, about the same rate as normalized results for the fourth quarter of 2010 and improved from the year-ago quarter. Business service revenues, which exclude CPE, declined 4.4 percent year over year and were down slightly sequentially.
Total business IP data revenues grew 8.5 percent versus the year-earlier first quarter, led by growth in VPN revenues. More than 70 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, cloud services and IP conferencing on top of their infrastructures. Total business data revenue growth was 0.3 percent when compared to a year earlier.
AT&T's first-quarter wireline operating income margin was 11.5 percent, down slightly compared to 12.0 percent in the year-earlier quarter and 13.0 percent in the fourth quarter of 2010.
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The deal will provide subscribers of Cellular South with a nationwide 4G-LTE footprint as well as satellite coverage in rural areas where there is no terrestrial network. It will also expand LightSquared's 4G data coverage to additional rural communities.
a cable operator serving more than 2.4 million customers in Florida, California and several other metro markets, has deployed the Cisco ASR 9000 Series Aggregation Services Routers as its Carrier Ethernet platform. The Cisco ASR 9000 is used to deliver enhanced video, data, voice and mobile backhaul services throughout its converged network. The company also will use the platform to continue to expand its high-speed Internet "Road Runner Lightning" service, using DOCSIS 3.0 technology, to all of its residential and business customers.
announced a significant expansion of its WiMAX network footprint and key capacity upgrades for mobile broadband customers in the greater Washington D.C. and Baltimore metro areas. Sprint and Comcast are also offering expanded coverage in these areas.http://www.clearwire.com.
