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AT&T Posts Revenue Gain From Mobile Growth

AT&T on Thursday reported revenue of US$31.6 billion for the third quarter, up 2.8 percent from the third quarter of 2009, with mobile data revenue and mobile subscriber gains from the iPhone driving the growth.

Operating income was up slightly, from $5.4 billion to $5.5 billion. Earnings per share, excluding one-time items, were $0.55 and met the expectations of analysts polled by Thomson Financial.

Net income for the quarter, including a tax settlement and the sale of Sterling Commerce, was $12.3 billion, compared to $3.2 billion last year.

AT&T's mobile data revenue -- including texting, mobile Web access and mobile applications -- grew 30.5 percent from the third quarter of 2009, to $4.8 billion, the company said in a news release. The AT&T network carried 161 billion text messages during the quarter, up 34 percent from a year earlier, while multimedia messages more than doubled, to 2.8 billion, the company said.

The telecom giant also reported a net gain of 2.6 million mobile customers, its largest increase ever in a third quarter. AT&T now has 92.8 million mobile customers.

"This was a terrific mobile broadband quarter," Randall Stephenson, AT&T's chairman and CEO, said in a statement. "Mobile broadband is the industry's most powerful growth driver, and demand is in its early stages in both the consumer and business segments. AT&T is well positioned for the opportunities ahead."

AT&T's mobile growth came largely from activations of Apple's iPhone. About 5.2 million iPhones were activated on AT&T's network during the quarter, the largest number of iPhone additions AT&T has reported during any quarter. Twenty-four percent of the iPhone customers were new to AT&T.

Apple released its new iPhone 4 in late June, days before the start of AT&T's third quarter on July 1.

AT&T reported that customers with traditional billing accounts activated 8 million smartphone devices during the quarter, also a record. More than 80 percent of the handsets activated during the quarter were smartphones, AT&T said.

Overall, mobile revenue grew 11.4 percent from the third quarter of 2009, with AT&T reporting $15.2 billion from mobile service and equipment sales.

Wireline revenue was down 3 percent from a year earlier, with AT&T reporting revenue of $15.3 billion from that sector. However, AT&T reported a net gain of 148,000 wireline broadband connections. AT&T's U-verse broadband, television and voice service were up 84.5 percent from the third quarter of 2009, to $1.1 billion.

Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's e-mail address is grant_gross@idg.com.

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