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AT&T Wireless Reports Revenue, Subs Gain

While top-ranked competitors Verizon Wireless and Cingular Wireless show signs of flagging sales, third-ranked AT&T Wireless announced Tuesday gains in new subscribers, which in turn pushed a revenue increase of 30 percent.

All told, through partnerships and affiliates, AT&T Wireless has 20.8 million wireless phone users.

With 927,000 new subscribers in the fourth quarter of 2001, AT&T Wireless posted revenues of $3.5 billion, a sign of success even though its stock value took a dip recently. The news pushed their stock to $12.22 per share at press time.

John Zeglis, AT&T Wireless chairman and chief executive officer, points to the company's continued growth as a key factor in its success.

"For the eighth consecutive quarter, we've met our key growth goals," he said. "Through disciplined and consistent execution, we've grown the company more in the last 24 months than in the previous six years."

Troubling factors point to a potential pitfall for the wireless outfit, however. Revenues from equipment sales and average revenue per user (ARPU) dropped in 2001, attributable mainly to pricing competition and lower handset costs.

ARPU for 2001 was an average $62.60, an eight percent decline from 2000. This, despite the fact customers are using their wireless phones an average of 34 minutes a month more than the previous year. Equipment revenues dropped 15 percent to $287 million.

AT&T Wireless' churn rate for the quarter ended on a positive note. Churn, a formula that distinguishes between the number of incoming and reoccurring customers to outgoing customers, was 2.7 percent. That helped the company maintain an overall yearly churn rate of 2.9 percent, the rate AT&T Wireless ended up with in 2000.

Executives are looking at 2002 with a conservative eye, a necessity many high-tech companies are taking in wake of the country's current recession. Revenue growth in 2002, officials said, would be in the low teens down from analyst projections of 19 percent. Similar growth is expected with its subscriber base.

Mohan Gyani, AT&T Wireless president of mobility services, said the year will see increased reliance on the bottom line.

"For 2002 and beyond we're sharply focused on a strategy to deliver value to our shareowners and customers," he said. "We're identifying profitable growth opportunities and deploying the right resources, in a capital efficient way, to be the premier mobile voice and data carrier in North America."