AT&T Posts Flat Q3 Results, Adds 2 Million Subscribers

AT&T, the largest telecommunications provider in the U.S., has recently posted their financial results for the third quarter of 2009. The overall results seem flat as the company’s net income has slightly dropped, but its wireless business sure looks promising even under bad economy with the help of Apple’s iPhone.

For the period ended 30 September, AT&T earned $3.2 billion of net income, dipping only 1.2 percent from $3.23 billion in the same quarter a year earlier. Its total revenue fell by 1.6 percent to $30.9 billion, matching analysts’ expectations.

While its financial performance changed little, the wireless carrier surprised analysts by adding 2 million wireless subscribers in Q3. The addition matched the pace of last year and boosted the company’s total subscribers to 81.6 million at the expense of other rival carriers. Total churn rate also posted a record-low of 1.43 percent, down from 1.69 percent in 2008, meaning there were more customers coming in than leaving.

The inflow of new customers is believed to be driven by the 3.2 million iPhone activated in the quarter, which surpasses the 2.4 million units of addition in last year’s quarter by 33 percent. Among these iPhone subscribers, 40 percent were new to AT&T, which proves that the iPhone has been playing a vital role in expanding the carrier’s customer base.

Apart from iPhone, AT&T also saw strong growth in sales of smartphones and messaging-centric handsets, as the carrier shipped a total of 4.3 million 3G integrated wireless devices in the quarter. Its wireless business continues to grow by generating $3.6 billion in wireless data revenue, 33.6 percent up from a year ago. On the other hand, the traditional landline unit is shrinking quickly even though it still makes up the majority of the carrier’s revenue.

AT&T's recent focus has been upgrading its network and increasing revenue from selling data services, encouraging email use and Internet surfing. But at the same time, its strong performance in the wireless unit also hinges on its exclusive deal with Apple. This means the end of AT&T’s iPhone exclusivity, which has been rumored for quite some time, is likely to put the carrier’s future financial results in jeopardy.

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