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AT&T activates 4.1M iPhones but subscriber growth misses expectations

post #1 of 18
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AT&T said Thursday that it activated over 4.1 million iPhones during the final quarter of its exclusive U.S. deal with Apple on the handset, though shares of the carrier suffered in early morning trading as overall subscriber growth came in under expectations.

For the fourth fiscal quarter of 2010, AT&T reported a profit of $1.09 billion, or 18 cents per share, well short of its $2.7 billion, or 46 cents per share profit in the same quarter last year. And although it activated over 4 million iPhones, the No. 2 U.S. wireless carrier said that it netted just 400,000 new contract customers during the quarter.

That figure missed Wall Street's consensus view by more than 100,000 subscribers. It also fell short of Verizon's net adds during a similar time frame, which totaled roughly 572,000 after subtracting activations from roughly 300,000 tablets, MiFi devices and other devices that Verizon books as post paid compared to AT&T's booking as pre-paid. As such, shares of the Dallas, TX-based carrier slipped more than 3% in early morning trading Thursday.

On a brighter note, AT&T demonstrated that it retains other areas of potential growth outside of the iPhone. In particular, the carrier said its addition of 442,000 wireless 3G data customers using tablets like the iPad were much higher than it had expected.

It also reported that wireless data revenues -- driven by messaging, Internet access, access to applications and related services -- increased $1.1 billion, or 27.4*percent, from the year-earlier quarter to $4.9*billion. Postpaid wireless subscribers on monthly data plans also increased by 20.4*percent over the past year, while text messages carried on its network increased by nearly 29*percent to 173.1*billion. At the same time, multimedia messages increased by 75.0 percent to 3.9*billion.

Looking ahead to 2011, AT&T said it expects consolidated revenue growth but offered no formal estimates as it's likely taking a wait-and-see approach to the impact Verizon's iPhone launch will have on its wireless business when the rival carrier begins offering the iPhone to its own customers on February 10th.
post #2 of 18
Good grief. Based off of this snippet of chosen information posted here you might think AT&T was performing horribly.

How about the following per the CEO -

* Best 4Q and year wireless net adds in history
* ARPU growth for 8 straight QTR's
* Almost $20 billion in mobile data annualized revenue. Tripled from 3 years earlier.
post #3 of 18
It is amazing that they apparently added more tablet customers than phone customers, although I can kind of see why that might be the case.
post #4 of 18
Quote:
Originally Posted by SHOBIZ View Post

Good grief. Based off of this snippet of chosen information posted here you might think AT&T was performing horribly.

How about the following per the CEO -

* Best 4Q and year wireless net adds in history
* ARPU growth for 8 straight QTR's
* Almost $20 billion in mobile data annualized revenue. Tripled from 3 years earlier.

Adding to that
  • Best-ever wireless net adds, with a more than 2.8 million increase in total wireless subscribers to reach 95.5 million subscribers in service
  • Best-ever fourth-quarter total wireless churn at 1.32 percent; 1.15 percent postpaid churn, matching previous best-ever fourth-quarter level

They are now ahead of Verizon in some ways, though that lead is surely short lived. For instance, Verizons 94.1 million customers compared to AT&Ts 95.5 million.

They also came below analyst predictions. Still, they had a lower churn rate than AT&T which is pretty impressive pre-iPhone announcement. They will surely fly past AT&T this next quarter and then maintain that lead growth quarter after quarter.
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post #5 of 18
The number I'd like to know is how many of those 400,000 new contracts were iPhones.
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post #6 of 18
I don't see why some consensus of people who by definition do not have all the pertinent data is so critical to deciding whether a company is successful or not.

Never mind that is a single metric of what a company is doing overall.

Is AT&T now going to go through a period of time when they are referred to as "beleaguered" or is that too big a stretch?

How many here recall how many times "Apple" and "Beleaguered" were used in the same headline - and how many times it was proclaimed that "Apple is Doomed" - often on the heels of their latest report or record unit sales and profits.

What is those "experts" have stock in Verizon (or options or whatever) and want to see AT&T take a hit - or some similar scenario.

I am not sure which would be better - requiring that someone giving advice on a stock have no material interest in the performance of that stock - or the other way around - don't tell me what you think a stock will do unless you are following your own advice. But then how do you determine when someone is trying to manipulate or at least influence the price of a stock?
post #7 of 18
By total subscribers, AT&T is now the largest cell phone company. Not sure, how that is bad for AT&T. AT&T likely will not lose many subscribers because of the iPhone news. Currently, the iPhone on Verizon will be inferior because 1) it doesn't do both data and voice, and 2) it's data network is faster. Verizon people are used to that so it isn't a big deal. Further, Apple went to Verizon to gain market share, not have AT&T users defect to Verizon.
post #8 of 18
Quote:
Originally Posted by TBell View Post

By total subscribers, AT&T is now the largest cell phone company. Not sure, how that is bad for AT&T. AT&T likely will not lose many subscribers because of the iPhone news. Currently, the iPhone on Verizon will be inferior because 1) it doesn't do both data and voice, and 2) it's data network is faster. Verizon people are used to that so it isn't a big deal. Further, Apple went to Verizon to gain market share, not have AT&T users defect to Verizon.

Wishful thinking. And how do you know why Apple went to Verizon? They went to sell as many iPhones as possible, and that requires not only switchers from Droid on VZ, but also switchers from ATT. Hm.... I bet ATT's iPhone activations will be... 1 million less than they were in the year ago Q1. And Verizon - I bet they activate at least 6 million this coming quarter, compared to ATT which should be half that.
post #9 of 18
Maybe not right away, but I predict by the end of the year, AT&T will get crushed. As soon as my AT&T contract is up or I'm able to sell it off, I'm going to replace my iPhone with a Verizon version. And I don't think I'm alone.
post #10 of 18
Quote:
Originally Posted by TBell View Post

By total subscribers, AT&T is now the largest cell phone company. Not sure, how that is bad for AT&T. AT&T likely will not lose many subscribers because of the iPhone news. Currently, the iPhone on Verizon will be inferior because 1) it doesn't do both data and voice, and 2) it's data network is faster. Verizon people are used to that so it isn't a big deal. Further, Apple went to Verizon to gain market share, not have AT&T users defect to Verizon.

What good is faster speeds if you can't get a connection? Marketing FUD. AT&T is only faster in certain markets, and under ideal conditions. Stick it in a demanding market and it crashes to EDGE speeds (example: my iPhone ALWAYS craps out strolling around the Magic Kingdom, when I need it to work the most)
post #11 of 18
Quote:
Originally Posted by enjourni View Post

Maybe not right away, but I predict by the end of the year, AT&T will get crushed. As soon as my AT&T contract is up or I'm able to sell it off, I'm going to replace my iPhone with a Verizon version. And I don't think I'm alone.

The grass is always greener on the other side. Will be fun to read the comments here six months from now.
post #12 of 18
Quote:
Originally Posted by DrDoppio View Post

The grass is always greener on the other side. Will be fun to read the comments here six months from now.

Or February 10, Verizon launch day... Will their servers melt, just as ATT and Apple's did last year when the iPhone 4 hit the market?
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post #13 of 18
Quote:
Originally Posted by enjourni View Post

Maybe not right away, but I predict by the end of the year, AT&T will get crushed. As soon as my AT&T contract is up or I'm able to sell it off, I'm going to replace my iPhone with a Verizon version. And I don't think I'm alone.

Why do you think they will get crushed? I think they will drop in subscriber numbers, increase churn rate and once again be the 2nd largest largest carrier in the US but I dont see how any definition of the word crush could accurately be applied to AT&T. After all they still carry the iPhone.

I think the biggest blows from the Verizon iPhone will be at the expense of other cellphones on Verizons network. How many who have been buying Androids and Blackberries on Verizon would have bought an iPhone if it was available? I think quite a few.

I think the next largest defeat will be from the lesser MNOs and MVNOs from people who either wouldnt or couldnt go with AT&T but would or could go with Verizon. Between AT&T and Verizon you have the majority of the subscriber base covered. FInally, I think AT&T will be affected the least because they ae still insulated by having the iPhone, having many iPhone customers who re-upped their contracts for the iPhone 4 with $325 (minus $10 per month) ETFs. Even the much faster data of HS*PA and SV&D play a role.
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post #14 of 18
I think the only thing you can really say with any certainty is that with the several years that AT&T has hand exclusivity - that anyone who has wanted an iPhone since the beginning - or even since the 3G - would most likely have done so by now. Including those who had to switch networks to do so.

Meaning that any huge spike in new iPhones activated via AT&T would be unexpected.

You can also say with some certainty that anyone who switched from Verizon to AT&T specifically to get an iPhone is a candidate for switching back to Verizon sometime in the next year and half or so as their contract expires - provided that the difference between AT&T and Verizon service and plan cost are not an inhibitor to switching back.

Is there a number available for how many iPhone subscribers AT&T has? and how many switched from Verizon to get the iPhone? If so then take a fraction of that number plus some fraction of existing Verizon customers to get a number for how many new iPhone activations Verizon can expect.

And while AT&T may lose customers to Verizon in the next few months - i would guess that it will be smaller than the number Verizon lost to AT&T over the last few years. Meaning that overall the relative size of each is not likely to change by a whole lot. Proportion of smart phones to all or iPhones to other will charge - but overall subscriber base - not much I think.

The only thing that we can be 100% certain of is that time will tell - and that it will take up to about 2 years for answers to all the questions above.
post #15 of 18
Quote:
Originally Posted by solipsism View Post

Adding to that
  • Best-ever wireless net adds, with a more than 2.8 million increase in total wireless subscribers to reach 95.5 million subscribers in service
  • Best-ever fourth-quarter total wireless churn at 1.32 percent; 1.15 percent postpaid churn, matching previous best-ever fourth-quarter level

They are now ahead of Verizon in some ways, though that lead is surely short lived. For instance, Verizons 94.1 million customers compared to AT&Ts 95.5 million.

They also came below analyst predictions. Still, they had a lower churn rate than AT&T which is pretty impressive pre-iPhone announcement. They will surely fly past AT&T this next quarter and then maintain that lead growth quarter after quarter.

AT&T is actually not ahead of Verizon. The 95.5 million posted for wireless customers include numbers for "connected devices" which mean anything that connects to their network that isn't a phone. Eg. netbooks, security networks etc. Verizon does not include connected devices in their 94.1 million. If they were to include connected devices they would total about 102 million customers easily beating AT&T.
Source: http://news.vzw.com/news/2011/01/pr2011-01-25.html

And actually Verizon had almost twice the number of NEW cell phone activations than AT&T this past quarter. AT&T had 400,000 post paid activations compaired to Verizon's 800,000.
Source: http://news.yahoo.com/s/nm/20110127/bs_nm/us_att

Not trying to be a fan boy just trying to post accurate information
post #16 of 18
Quote:
Originally Posted by lilgto64 View Post

I think the only thing you can really say with any certainty is that with the several years that AT&T has hand exclusivity - that anyone who has wanted an iPhone since the beginning - or even since the 3G - would most likely have done so by now. Including those who had to switch networks to do so.

You most certainly can't say that with certainty. I help people make decisions like these, and I have over 1500 clients. It's no small number that have clung to Verizon waiting, waiting, and are now peppering me with questions about the iPhone Feb 3.

Quote:
Meaning that any huge spike in new iPhones activated via AT&T would be unexpected.

Only to you.

Quote:
You can also say with some certainty that anyone who switched from Verizon to AT&T specifically to get an iPhone is a candidate for switching back to Verizon sometime in the next year and half or so as their contract expires - provided that the difference between AT&T and Verizon service and plan cost are not an inhibitor to switching back.

Now you're making some sense.

Quote:
Is there a number available for how many iPhone subscribers AT&T has? and how many switched from Verizon to get the iPhone? If so then take a fraction of that number plus some fraction of existing Verizon customers to get a number for how many new iPhone activations Verizon can expect.

But wait, I thought you said that anyone who wanted an iPhone would have switched to ATT already?

Quote:
And while AT&T may lose customers to Verizon in the next few months - i would guess that it will be smaller than the number Verizon lost to AT&T over the last few years. Meaning that overall the relative size of each is not likely to change by a whole lot. Proportion of smart phones to all or iPhones to other will charge - but overall subscriber base - not much I think.

There will be a large jump over the next two years as contracts expire on ATT. Once that is done, back to a steady state.
post #17 of 18
Quote:
Originally Posted by DrDoppio View Post

The grass is always greener on the other side. Will be fun to read the comments here six months from now.


Indeed.

I love the AT&T will be crushed comments. It keeps me laughing.
post #18 of 18
Quote:
Originally Posted by solipsism View Post

Adding to that
  • Best-ever wireless net adds, with a more than 2.8 million increase in total wireless subscribers to reach 95.5 million subscribers in service
  • Best-ever fourth-quarter total wireless churn at 1.32 percent; 1.15 percent postpaid churn, matching previous best-ever fourth-quarter level

They are now ahead of Verizon in some ways, though that lead is surely short lived. For instance, Verizons 94.1 million customers compared to AT&Ts 95.5 million.

They also came below analyst predictions. Still, they had a lower churn rate than AT&T which is pretty impressive pre-iPhone announcement. They will surely fly past AT&T this next quarter and then maintain that lead growth quarter after quarter.

The figures should look a bit more like this, AT&T have 86.2 million customers and 95.5 million all in, AT&T include other devices in this count like tablet PCs of which there are 9.3 million. Verizon on the other hand, their count is at 94.1 million, this doesnt include the additional 8.1 million of other devices like tablets. Now if you start looking at the total numbers again, you will see the errors that were made. This brings AT&Ts TOTAL devices to 95.5 million, whilst Verizons rises to 102.2 million.
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