Wireless, Enterprise Drive Strong AT&T Growth

Barry Levine, newsfactor.com Tue Apr 22, 12:39 PM ET

Strong results in wireless and enterprise sales led AT&T, the largest telecommunications company in the U.S., to first-quarter revenues 6.1 percent higher than the same period a year ago. Net income for the quarter was $3.5 billion, a 21.5 percent jump from $2.8 billion in the year-earlier quarter, and earnings per diluted share were up 26.7 percent.

Randall Stephenson, AT&T chairman and CEO, said his company had "good momentum across key growth areas, major cost initiatives are on track, and our operational results reinforce the confidence we have in our outlook." He added that steps are being taken to expand AT&T's networks and range of products "to drive continued growth in wireless, broadband and IP-based services."

Wireless Data Up 57 Percent

The company attributed the good news to several areas. Wireless revenue rose 18.3 percent, and revenue from wireless data -- including Internet access, messaging and media bundles -- jumped 57 percent. Wireless-data revenues are now about 21 percent of AT&T's total wireless-service revenues. Customers sent more than 620 million multimedia messages and 44 billion text messages, more than twice the volume in the same quarter last year.

The key to the revenue growth in wireless, AT&T said, was strong subscriber gains and a continued improvement in the average monthly revenue per subscriber (ARPU). The company noted that it has had seven consecutive quarters of growth in wireless ARPU, measured year-over-year.

The net gain in wireless subscribers was 104,000, nearly nine percent more than in the same quarter a year ago. Total average monthly subscriber churn was only 1.7 percent.

'Never Been More Promising'

Broadband revenues rose 13.2 percent, with nearly half a million broadband connections added in the quarter for a total of 14.6 million.

The company's U-verse TV service added 148,000 customers, making a total of 380,000 as it heads toward its goal of a million subscribers by the end of this year. U-verse is AT&T's next-generation IP-based video service.

Total enterprise revenues were up a modest 1.2 percent and enterprise service revenues were up 2.1 percent. Enterprise service includes Internet Protocol-based data services, such as managed Internet services, hosting and virtual private networks.

Stephenson said the future has "never been more promising." He pointed to the company's transaction with Aloha Partners for additional bandwidth, and AT&T's successful bids in the recently completed FCC spectrum auction for 700-MHz bandwidth. This new spectrum, he said, "will provide a terrific foundation for new wireless and integrated services" as it advances the company's potential for long-term growth.