Data Demand Fuels AT&T Earnings

Source: Reuters

Despite persistent concerns about macroeconomic conditions and brutal competition among wireless players, AT&T posted double-digit revenue growth for its second-quarter financials. Data services demands were a key factor in the growth.

The carrier also reported more than a million new subscribers and a 4.7 increase in revenue overall compared with the first quarter of 2008.

Consolidated revenues for AT&T totaled $30.9 billion, a 4.7 hike over the first quarter’s increase of 3.6 percent. A 15.8 percent spike in wireless revenues for the second quarter was tied to a 52.0 percent jump in data revenues, according to the carrier.

AT&T also added 1.3 million new subscribers in the second quarter and now has a 1.1 customer churn rate, which AT&T (NYSE: T) said is the lowest in company history.

The company cited 16.1 percent growth in wireline IP data revenues, which AT&T said was driven by strong increases in consumer video and broadband revenues and in business services such as virtual private networks, managed Internet services and hosting.

These financials are in stark contrast to continuing reports of difficulties in the wireless industry due to heavy competition and current economics that could impact mobile device use given such items are viewed as luxury items.

Earnings results also substantiate CEO Randall Stephenson’s contention that mobility can drive global prosperity, a statement he made at a conference keynote in June.

“Our results demonstrate the great strength of AT&T’s assets and our ability to execute with focus and discipline,” Stephenson, chairman and CEO, said in a statement.

“Mobility, broadband connectivity and integrated services that encompass voice, data and video are driving a new world of communications,” he said, adding that the carrier’s exclusive contract to sell the iPhone 3G
has delivered more than expected.

AT&T said wireless Internet access revenues more than doubled compared with the year-earlier second quarter. A 50 percent spike in revenues resulted from e-mail, messaging and data. Text-messaging volumes tripled compared with last year’s second quarter, and multimedia message volumes increased more than 170 percent.

Currently, 18 percent of AT&T’s wireless subscribers use an integrated device, an 8 increase over last year’s second quarter.

AT&T said it expects continued strong growth in wireless data services as increasing numbers of subscribers choose data plans and devices such as the iPhone 3G.

In the first weekend following launch, AT&T sold 1 million iPhone 3G devices.