Yes, when AT&T announced its quarterly results this morning everyone jumped on the fact that the telecom company’s earnings were down 23.6 percent year-over-year, despite a 2.4 percent increase in consolidated revenues. But what do people expect? This is the worst economic climate since the Depression.
I think it’s a little more interesting to dig into the other stats that AT&T announced–like stats iPhone-related.
In the fourth quarter of 2008, AT&T reported 1.9 million new 3G iPhone activations. 40 percent were new subscribers. The company also stated that since the Apple smartphone’s release in July 2008, there have been over 4.3 million activations. And the average revenue per iPhone user is 1.6 times that of other AT&T wireless customers.
So while the company had to spend a pile of cash in 2008 to get exclusive rights to the handset in the United States, and subsidize the cost, the company is also generating some pretty impressive data revenue from the decision.
Year-over-year, AT&T had a 51.2 percent increase in wireless data revenues, generating $3.1 billion, including that from the 80 million text messages sent in the fourth quarter alone. Overall, data transfer accounted for 26.6 percent of AT&T’s wireless service revenues in the last quarter.
As AT&T continues to add handsets to its already attractive line-up, the company seems to be well positioned heading into 2009. And this is probably the reason why the company issued one of the few positive outlooks for the year we’ve heard.
The company expects wireless revenues to grow in the single-digit range, but as the iPhone market matures, margins could increase to 40 percent. Not too shabby AT&T, not too shabby. Of course the company is also laying off 12, 000 employee, but hey, trade-offs.
