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Wireless and broadband fuel sales growth for AT&T

Gains from its broadband and wireless businesses have fueled AT&T’s best revenue growth in more than two years.

Total wireless revenue, which includes equipment sales, was up 7.0 percent from the first quarter a year earlier, to $17.9 billion, AT&T said Tuesday. Total wireless subscribers increased by just over a million.

Wireline revenue for the quarter, which ended March 31, was $14.6 billion, down 0.4 percent. The good news for AT&T, though, was that revenue from its U-verse broadband business increased 29.0 percent year over year.

The gains helped drive AT&T’s overall revenue to $32.5 billion, up 3.6 percent from a year earlier. That was the company’s biggest year-over-year sales increase in two years, AT&T noted.

Net income was $3.7 billion, roughly equal to its profit a year ago. Excluding one-time items, earnings per share were $0.71, compared to $0.64 in the year-ago quarter.

Tepid economic growth and competition in both its mobile and traditional wireline markets are bound to put pressure on AT&T’s growth, analysts said.

“We continue to believe the wireline business remains challenged while wireless competition—and the company’s response to it—will limit wireless service revenue growth,” said Canaccord Genuity analyst Greg Miller in a research note before AT&T issued its earnings.

But AT&T is striving to branch out in other areas, which is why its U-verse unit is being closely watched.

On Monday, AT&T said it might roll out 1Gbps fiber-optic service in up to 21 new metropolitan areas including Atlanta, Chicago, Los Angeles, San Francisco and San Jose, California.

The plans could cause AT&T to butt heads with Google, which is targeting some of the same cities with its fiber broadband service.

The possible deployments by AT&T depend on discussions with local leaders and groups on ways to roll out the ultra-fast broadband service, the company said.

The rollout of its U-verse broadband with GigaPower service, meanwhile, will also include television service. Before Monday’s announcement, AT&T had unveiled plans to build ultra-fast broadband in Austin and Dallas in Texas, and in Raleigh-Durham and Winston-Salem, North Carolina.

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