Tuesday, July 22, 2008

AT&T Sees Revenue Growth in Wireless, Decline in Wireline

Driven by continued 15.8% wireless revenue growth, AT&T reported consolidated Q2 revenues of $30.9 billion, up 4.7 percent versus reported results in the year-earlier quarter and up 3.6 percent compared with second-quarter 2007 pro forma revenues. Q2 net income totaled $3.8 billion, up from $2.9 billion in the year-earlier quarter, and reported earnings per diluted share totaled $0.63, up from $0.47 in the second quarter of 2007.

Some highlights for Q2:


  • AT&T ended the quarter with 72.9 million wireless subscribers.

  • Total wireless revenues increased 15.8 percent to $12.0 billion in the second quarter, and wireless service revenues, which exclude handset and accessory sales, grew 14.8 percent to $11.0 billion.

  • Retail postpaid subscriber ARPU (average monthly revenues per subscriber) was up 3.5 percent versus the year-earlier second quarter.

  • Wireless data revenues grew 52.0 percent versus the year-earlier quarter to $2.5 billion.

  • Data now represents 22.9 percent of AT&T's total wireless service revenues, up from 17.3 percent in the
    second quarter of 2007.

  • Text messaging volumes tripled versus totals for the year-earlier quarter, and multimedia message volumes increased more than 170 percent.

  • At the end of the second quarter, approximately 18 percent of AT&T's postpaid wireless subscribers had an integrated device, up from 8 percent one year earlier.

  • AT&T's second-quarter net gain in total wireless subscribers exceeded 1.3 million, down 123,000 versus results in the second quarter of 2007 and up 38,000 compared with the first quarter of this year.

  • Retail postpaid net adds totaled 894,000, down 2.0 percent versus the year-earlier second quarter and up 26.8 percent from results in the first quarter of this year.


  • Second-quarter revenues in AT&T's wireline segment totaled $17.6 billion versus $18.0 billion in the year-earlier quarter.

  • Reflecting solid demand from wireless carriers, Internet service providers, content providers and other customers, total wholesale revenues were $3.5 billion, down just 0.2 percent versus the year-earlier quarter. AT&T said this represents a major step up from a year-over-year decline of 8.3 percent in the second quarter of 2007 and marks the company's second consecutive quarter of sequential revenue growth in this category.

  • Total enterprise revenues in the second quarter were $4.7 billion, down 1.0 percent versus results for the year-earlier quarter, and enterprise service revenues, which exclude CPE sales, were down 0.1 percent. Enterprise fundamentals in terms of closed sales, a strong sales funnel and new service adoption remain solid. AT&T expects to deliver positive growth in total enterprise revenues for the full year 2008.

  • AT&T's total regional business revenues increased 1.6 percent in the second quarter to $3.2 billion. Regional business data revenues grew 5.2 percent, led by robust growth in Ethernet services and 13.7 percent growth in IP data services, including double-digit gains in managed Internet, VPN and hosting services.

  • Data growth was led by a 16.1 percent increase in revenues from IP-based services, with continued gains in high speed Internet, managed Internet, VPN and hosting services.

  • Data transport service revenues increased 1.1 percent, and packet switched data revenues, which include Frame Relay and ATM services, were down 13.5 percent.

  • AT&T U-verse TV Services experienced a net subscriber gain of 170,000 to reaching 549,000 in service.

  • U-verse network deployment is on schedule, install times continue to decline and the attach rates for broadband service continue to be high. The company is on a trajectory to reach its target of more than 1 million AT&T U-verse TV subscribers by year-end 2008.

  • Regional consumer IP revenues, which combine revenues from broadband and AT&T U-verse services, grew 19.3 percent versus the year-earlier quarter, and revenues per consumer household served increased 4.2 percent.

  • Total regional consumer revenues were $5.6 billion, down 2.1 percent versus the year-earlier quarter and down 0.7 percent sequentially. In addition to operational trends, these comparisons also reflect a change in AT&T's relationship with Yahoo! Inc., which provides portal services to AT&T's more than 14 million wireline broadband subscribers. Under the new arrangement, AT&T no longer pays monthly portal fees and receives a reduced level of shared advertising revenues from Yahoo!

  • Regional consumer revenue connections (retail voice, high speed Internet and video) totaled 48.4 million at the end of the quarter, versus 49.5 million at the end of the second quarter of 2007 and 49.3 million at the end of the first quarter of 2008.

  • Total consumer broadband and TV connections over the past year increased by 2.2 million. At the end of the second quarter, AT&T had 14.7 million total broadband connections, up 1.4 million over the past year and up 46,000 in the second quarter of 2008.


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