Apple’s iPhone is expected to help AT&T weather the recession by helping the telecom giant report solid numbers in its first quarter results on Wednesday, according to financial reports.
Though the company subsidizes upfront sales of the iPhone, its exclusive deal has brought in huge gains in subscriber growth and overall revenue, which is one reason why AT&T is reportedly negotiating to extend the agreement with Apple (NASDAQ: APPL) until 2011.
AT&T’s fourth-quarter iPhone 3G activations totaled 1.9 million — 40 percent of which were new customers, AT&T said.
The company’s total iPhone activations over the last half of 2008 topped 4.3 million. AT&T also said in its most recent earnings statement that iPhone users are higher-value — delivering 1.6 times the average revenue per user — and less likely to leave than AT&T’s average wireless customer.
Fueled by its mobile unit, AT&T is expected to report first quarter revenue of about $31.12 billion, up 1.2 percent from a year earlier, based on the consensus estimate of analysts polled by FactSet Research, according toMarketWatch.com.
Meanwhile, as the big players in the wireless industry report earnings over the next three weeks, investors will be watching to see how the recession has impacted profits. Verizon Wireless (NYSE: VZ) will report on April 27, Sprint Nextel (NYSE: S) will report May 4 and Deutsche Telekom (NYSE: DT), which owns T-Mobile USA, will report on May 7.