Strong Mobile Data Growth Pushes Up AT&T's Revenue (NewsFactor)

AT&T executives are smiling. The company's second-quarter results are strong, thanks, in part, to strong mobile broadband growth and record smartphone sales.

For the quarter ended June 30, AT&T's revenue totaled $31.5 billion. That's up more than $680 million, or 2.2 percent, versus the year-earlier quarter. The results mark AT&T's sixth consecutive quarter with a year-over-year revenue increase.

"Mobile broadband growth continues to be robust, and we are seeing encouraging signs in wireline revenues. This adds to our confidence as we look ahead," said Randall Stephenson, AT&T chairman and CEO. "Mobile broadband with IP infrastructure and cloud services are transforming our industry and are creating unprecedented opportunity. Our planned acquisition of T-Mobile USA will accelerate development of next-generation capabilities, and it will lay the groundwork for continued high-tech innovation for years to come."

Wireless Business Swells

AT&T posted a net gain in wireless subscribers of 1.1 million to reach 98.6 million in service. This included gains in every customer category. Additions for the quarter include postpaid net adds of 331,000.

AT&T also had a record quarter with branded computing subscribers, a new growth area for the company that includes tablets, air cards, MiFi devices, tethering plans, and other data-only devices. AT&T added 545,000 of these devices to reach four million, nearly twice as many as a year ago. Most of those new devices were tablets, with 377,000 added in the quarter, 30 percent of them postpaid.

In the second quarter, AT&T sold 5.6 million smartphones, a second-quarter record and the third-highest quarter ever. Smartphone sales also increased more than 43 percent year over year. Sales of non-iPhone smartphones more than doubled year over year. Nearly 70 percent of postpaid device sales were smartphones. During the quarter, 3.6 million iPhones were activated.

"Wireless data revenues -- driven by Internet access, access to applications, messaging and related services -- increased more than $1 billion, or 23.4 percent, from the year-earlier quarter to $5.4 billion," the company said. "AT&T's postpaid wireless subscribers on monthly data plans increased 19.5 percent over the past year. Compared to the year-earlier quarter, total text messages carried on the AT&T network increased 24 percent to 190.8 billion, and multimedia messages increased 54 percent to 4 billion."

Feature Phone Phasing Out

"The mobile data growth isn't necessarily people who were smartphone customers two years ago and are now deciding to buy bigger data packages. On the contrary, the market is shifting from feature phones to smartphones," said Avi Greengart, an analyst at Current Analysis.

"So consumers are buying smartphones and signing up for data plans, where in the past they resisted signing up for a data plan. Part of that is that consumers are seeing the value proposition. It's making sense to them. They are willing to pay for data when before they were not."

Although SMS revenues remain strong, consumers are buying data plans to tap into e-mail, Google searches, navigation and downloading and using apps that pull data. Beyond the demand for data, Greengart said declining smartphone prices are also helping.

"You can get a smartphone now for $40 to $99. You don't have to spend $199 to get a smartphone now. The smartphones are really edging in on the QWERTY messaging devices that were really popular a couple of years ago. When people are coming to the end of their contracts for their feature phones, they are buying smartphones instead."

Source: http://us.rd.yahoo.com/dailynews/rss/internet/*http%3A//news.yahoo.com/s/nf/20110721/tc_nf/79467

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