AT&T Q1 Net Up Despite Verizon iPhone
AT&T’s Q1 profit jumped 39 percent year-over-year to $3.4 billion though the company’s postpaid net additions plummeted 88 percent from a year earlier to 62,000. Executives insisted that customers stayed with AT&T despite Verizon’s iPhone launch. AT&T remains concerned about long-term capacity constraints as it relates to spectrum, “and that’s one of the things that will hopefully be relieved with the T-Mobile transaction,” Ralph de la Vega, CEO of AT&T’s mobility and consumer markets, said on a conference call Wednesday.
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AT&T entered the quarter with some uncertainty, Chief Financial Officer Rick Lindner said. “We felt we were prepared for changes in exclusivity,” but when the results came in, they were “better than we expected,” Lindner said. He acknowledged “there was an impact” with a “very small increase in post-paid” customer loss, but the impact was “significantly less than many in the financial community and the media expected and, frankly, they were less than we expected.” Some 3.6 million iPhones were activated in the quarter, with nearly a quarter coming from new customers. Lindner announced that he will retire as CFO in June, and John Stephens, currently senior vice president and controller, will take his place.
The company is on track to launch its LTE network around mid-year, covering some 70 million POPs by year-end, de la Vega said. Until then, the carrier expects to rely on its lineup of Android, BlackBerry and Windows devices. Some 40 percent of smartphone sales were in these three operating systems, de la Vega said. The carrier’s network performance is getting better with “solid improvement in voice metrics,” he claimed. The transition from LTE to HSPA+ would be almost seamless, he said.
In Q1, AT&T began breaking out the number of “branded computing subscribers” it added to its network through devices like tablets and netbooks, de la Vega said. It added more than 420,000 Q1 for a total of 3.4 million, he said. “That’s about twice as many as we had about 12 months ago,” he said. Most of those added, 320,000, were through tablets, he said. AT&T also added 218,000 U-verse TV subscribers in Q1, for a total of about 3.2 million, which is up by about 900,000 in the last year, he said.
The operator continued to see growth in U-Verse even as legacy DSL and voice connections continued to slide. U-verse video, voice and data services generated about $1.5 billion in revenue, representing about $6 billion on an annualized basis, AT&T said. That’s up more than 50 percent from a year earlier. Residential phone lines fell to 23.48 million at the end of March, a year-over-year decline of 11.8 percent.