When I look at AT&T (T) it reminds me of the middle child of a family that adores the first born who can never do anything wrong. This middle child always seems to be living in the shadow of the older sibling and no one notices how well it manages - but it does and it manages to live through the year quite well. This is AT&T. It is not the biggest, not looked at as the best but it always manages to make things work.
Many studies have shown that AT&T customers are generally the least satisfied among all major carriers. Yet they aren't running away amass. Revenue from its wireless data, increased by $1 billion over the 2011 first quarter $6.1 billion. Its true, wireless voice revenue fell off from the first quarter of 2011, but they also set a smartphone sales record by selling 5.5 million units. Wireline revenue was up by nearly 2% to $1.8 billion, the seventh consecutive quarter of increased revenue in that business niche.
AT&T's network does not compare with the favored first born - Verizon (VZ). When Apple (AAPL) unveils the next iPhone, much broader coverage may be in order. This would give the edge to Verizon, yet AT&T has a larger base of Apple customers who may be looking to upgrade. The Apple device made up 78 percent of AT&T's smartphone sales in the first quarter. At Verizon, the product accounted for 51 percent. Make no mistake; AT&T has a lot to lose if it cannot keep up with the extensive and ever growing network demand. Yet it still manages to make a good profit.
Its new alliance with Nokia (NOK) and Microsoft (MSFT) is another gamble that could pay off in the long run. It is no secret that consumers would welcome a third major player to the field who could compete with Apple and Google's (GOOG) android. AT&T is not the favorite; Nokia has lost its place as favorite atop the phone world; and Microsoft is looking to compete in a lucrative field with a solid base to do it when Windows 8 comes out this fall. But this alliance may be formidable if consumers are pleased. Nokia still knows how to make phones and Microsoft has the windows software to compete. This is a new venture between the three. As Microsoft added LTE capabilities to its Windows Phone platform, AT&T started selling the Lumia 900 phone, which has had reviews both highly positive and critical (depending upon who you ask).
What we may conclude in these observations is that AT&T, with its 5.3% prized and consistent dividend will continue to perform well. It may not always be the best or considered the best. But it always seems to do enough to make a profit, share a generous dividend, and compete in the world of Telecom Services effectively.