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.”

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