AT&T Q1 On Target, Wireless Data Access a Highlight

AT&T said Tuesday that it ended the first quarter with 71.4 million wireless subscribers and a retail churn of 1.2 percent.

The telecommunications giant detailed its wireless stats on its first quarter earnings report (statement). AT&T reported first quarter net income of $3.5 billion, or 57 cents a share, on revenue of $30.7 billion, up 6.1 percent from a year ago. Excluding charges, AT&T reported earnings of 74 cents a share, which matched estimates.

Wireless growth fueled the quarter for AT&T. The company said its wireless revenue was up 18.3 percent to $11.8 billion. Wireless data services revenue – Internet access, e-mail, messaging and data access – was up 57.3 percent from a year ago to $2.3 billion. In the quarter, AT&T’s wireless customers sent more than 620 million multimedia messages and 44 billion text messages, double year ago rates. Strong data revenues also boosted AT&T’s profit margins – the wireless unit had operating income margin of 25 percent, up from 15.2 percent from a year ago.

On a conference call, AT&T CFO Rick Lindner said that the company only has 11 million 3G devices in service. As 3G devices roll out, AT&T will have an opportunity to boost data services revenue growth. “We have great upside potential in wireless data,” said Lindner. He outlined the following:

And the data services growth:

And a bit on the wireless roadmap:

On the economy, Lindner chose to let the current quarterly results do the talking and noted that AT&T’s business “is more defensive than most.”

By the numbers for AT&T’s other units:

• Enterprise IP data revenue–services such as Internet services, hosting and virtual private networks–was up 22.9 percent from a year ago. Enterprise revenue overall was up 1.2 percent from a year ago.
• AT&T’s broadband revenue was up 13.2 percent in the first quarter to $1.4 billion. Total broadband connections was 14.6 million, up 13.9 percent from a year ago.
• The U-Verse TV service ended the quarter with 379,000 subscribers. U-Verse gained 148,000 subscribers and AT&T reiterated that it expects to have 1 million subscribers by the end of the year.

Here’s the look at the U-Verse landscape: