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AT&T activates 1.6M more iPhone 3Gs as data revenues jump

post #1 of 92
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AT&T said Wednesday that although first quarter profits slipped 9 percent, its wireless data revenues grew nearly 40 percent as it was able to achieve its third consecutive quarter of double-digit postpaid net subscriber additions on the back of 1.6 million new iPhone 3G activations.

For the quarter ended March 31, 2009, AT&T reported a profit of $3.1 billion or $0.53 per diluted share on consolidated revenues of $30.6*billion, down from $3.5 billion or $0.57 per share on sales of $30.74 billion during the same quarter of 2008.

The Dallas, Texas-based telecommunications firm said the quarter was highlighted by improved postpaid wireless growth with a substantial step up in penetration of integrated devices such as smartphones, double-digit increases in revenues from IP-based and strategic business services, and further AT&T U-verse TV subscriber gains.

In particular, AT&T grew its wireless subscribers by 1.2*million in the first quarter to end with 78.2*million subscribers, up 6.9*million over the past year. The gains were driven in large part by a significant rise in retail-based net subscriber additions, which were 24.1*percent higher at 875,000 than in the year-earlier quarter.

Postpaid subscriber growth also reflected robust demand for Apple's iPhone 3G. Quarterly iPhone 3G activations totaled over 1.6*million, down from 1.9 million during the December quarter, though more than 40*percent of those activations continue to come from customers who were new to AT&T.

"I am particularly pleased with the success of our iPhone 3G initiative, which has driven strong high-end customer growth and delivered financial benefits ahead of our original outlook," said AT&T chief executive Randall Stephenson. "Business and consumer expectations for mobility are on the rise, wireless innovation is flourishing and the opportunities ahead are substantial.”

AT&T's exclusive deal as Apple's U.S. iPhone service provider also continues to attract subscribers with ARPUs (average monthly revenues per subscriber) that are approximately 1.6 times higher and churn rates that are significantly lower than the company’s overall postpaid subscriber base.

The arrangement helped boost the providers wireless data revenues by $884*million, or 38.6*percent, versus the year-earlier first quarter to $3.2*billion. All told, data service revenues represented 27.2*percent of AT&T’s first-quarter wireless revenues, up from 21.5*percent in the year-earlier quarter and 16.0*percent in the first quarter of 2007.

During the quarter, AT&T said it facilitated the transmission of more than 94*billion text messages, or more than double the total for the year-earlier quarter. Internet access and media bundle revenues also continued to rise.

The number of 3G devices on AT&T’s wireless network also more than doubled over the past year, and at the end of the first quarter, 40.8*percent of postpaid wireless subscribers had a 3G device, up from 19.5*percent one year earlier. Similarly, the number of integrated devices on AT&T’s network has more than doubled over the past year. At the end of the first quarter, 31.7*percent of its 61.0*million postpaid subscribers had integrated devices.

The carrier's activation of 1.6 million iPhones during the quarter suggests Apple may report a sequential drop in iPhone 3G shipments for its second-fiscal quarter, which also ended in March. During the previous quarter, the iPhone maker shipped 4.36 million of the touch-screen handsets on 1.9 million domestic activations by AT&T.

Apple will report its results following the close of the stock market this afternoon. AppleInsider will provide in-depth coverage.
post #2 of 92
Sounds about on target. The sensible analysts are predicting roughly 3 million iPhones sold in this quarter. Since 50% are sold in the US, you'd expect AT&T to be selling roughly 1.5 million.
post #3 of 92
I's like to know- To what extent has the 3G network slowed down as a result of AT&T's relentless promotion of other 3G devices compromising the very iPhone it's profitting on?
post #4 of 92
AT&T has pretty good momentum, too... I have absolutely no worries about them... That's neither t-Mobile nor Sprint.

We mean Apple no harm.

People are lovers, basically. -- Engadget livebloggers at the iPad mini event.

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post #5 of 92
Quote:
Originally Posted by teckstud View Post

I's like to know- To what extent has the 3G network slowed down as a result of AT&T's relentless promotion of other 3G devices compromising the very iPhone it's profitting on?

For AT&T, the iPhone is a momentum product. They make much more money (per phone) selling other 3G devices.
post #6 of 92
Quote:
Originally Posted by DHKOsta View Post

For AT&T, the iPhone is a momentum product. They make much more money (per phone) selling other 3G devices.

You think they're not making money on iPhone's data plans? Not the device- the plan.?
post #7 of 92
Quote:
Originally Posted by teckstud View Post

You think they're not making money on iPhone's data plans? Not the device- the plan.?

iPhone data usage has forced massive capital improvements to their network, and the iPhone carries a $300-$400 subsidy from AT&T. Besides, they kick back a significant portion of the data back to Apple. Sure, they're making some money, but the business driver behind the iPhone is money for capital improvements to their network, and converting customers from other carriers. Selling an iPhone isn't nearly as profitable in the short term as selling those other 3G phones, though it's great business for other reasons.
post #8 of 92
They're just getting a free ride off of Apple. I still can't complete a phone call without it dropping.
post #9 of 92
It must because I live in the Silicon Valley area, but I've never had a problem with AT&T, neither with their customer service nor the network. I'll drop calls in the obvious areas, like over 17, but it works pretty darn good. I've been a customer since they were first Cingular back in 1998, and never felt the need to switch. The iPhone only added more to the service. 3G works beautifully here (for me anyway). Oh, one exception: at ATT Park. Absolutely "zero" coverage in the park, perhaps they don't want 40,000 fans jawing on the phone when they should be watching the game?
post #10 of 92
Quote:
Originally Posted by Jerseymac View Post

They're just getting a free ride off of Apple. I still can't complete a phone call without it dropping.

I on the other hand have never had that problem.
post #11 of 92
Quote:
Originally Posted by DHKOsta View Post

iPhone data usage has forced massive capital improvements to their network, and the iPhone carries a $300-$400 subsidy from AT&T. Besides, they kick back a significant portion of the data back to Apple. Sure, they're making some money, but the business driver behind the iPhone is money for capital improvements to their network, and converting customers from other carriers. Selling an iPhone isn't nearly as profitable in the short term as selling those other 3G phones, though it's great business for other reasons.

Bottom line- regardless of where the money goes- captial improvements, short term/ long term whatever- they're making money from Apple's iPhones. Don't kid yourself.
post #12 of 92
Quote:
Originally Posted by parky View Post

I on the other hand have never had that problem.

Then you're one of the lucky ones. Count your blessings.
post #13 of 92
Quote:
Originally Posted by teckstud View Post

Then you're one of the lucky ones. Count your blessings.

I must be one of the lucky ones also. I live in NJ and I have far better service with AT&T than I ever did with Verizon. I think I may have dropped 1 call since getting my iPhone a year ago. I would never consider going back to Verizon.
post #14 of 92
These are some good numbers. Every time I read this kind of news it brings to mind Steve Balmer and his obnoxious and flippant IPhone comments when it first arrived.

What he SHOULD have said was:
http://www.youtube.com/watch?v=az3XB...E6013&index=32

God, he's GROSS.
post #15 of 92
Did AT&T report what percentage of their new subscribers came over for the iPhone? They better have a good trick planned for when the iPhone goes to other US carriers.

Real question: What was the last device that drove people to switch carriers in such large numbers? Apple should have some powerful leverage with AT&T.
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post #16 of 92
The article states that 3G phone activations doubled over the last year. I read this to mean phones with 3G capabilities, but not necessarily phones that are paying for a 3G data plan. Aren't many basic cell phones now being marketed to have 3G?

Quote:
Originally Posted by DHKOsta View Post

Sure, they're making some money, but the business driver behind the iPhone is money for capital improvements to their network, and converting customers from other carriers.

Which is why I think AT&T really liked the revenue sharing plan. It took a lot of work off their retail staff to activate the devices and they only had to pay Apple a small fee per unit that was active and current on their network, not this huge lump sum at the start of the contract. I really this model would have worked out because it would have been much better for the consumer in the long run.


Quote:
Originally Posted by Psych_guy View Post

It must because I live in the Silicon Valley area, but I've never had a problem with AT&T, neither with their customer service nor the network.

Welcome to AI! My coverage with AT&T has been great. There is the occasional time with only EDGE (like upstate NY last weekend) or with 3G that is slower than EDGE (like in Las Vegas during CES). But today I'm in Cincinnati and just measured 1.71Mbps down and 0.67Mbps up on AT&T's 3G network.

One aspect of the iPhone I like is that when I call 611 from the iPhone I get to choose to speak with an AT&T rep about my account or speak with an Apple rep about the device itself. This is unique and a good thing to have. I recall reading that Verizon wasn't going to let Apple have their own support center or service their own HW. Thank goodness AT&T knew when to bend over or the iPhone may have ended up on Sprint or T-Mobile, then talk about bad service and spotty coverage.
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post #17 of 92
Quote:
Originally Posted by teckstud View Post

Bottom line- regardless of where the money goes- captial improvements, short term/ long term whatever- they're making money from Apple's iPhones. Don't kid yourself.

I'm having trouble understanding where you're getting lost here. I didn't say they weren't making money. I was just asserting that iPhone revenue doesn't net AT&T much cash. Those are two completely different things. I wouldn't have called it "great business" if it wasn't making money.
post #18 of 92
Quote:
Originally Posted by DHKOsta View Post

For AT&T, the iPhone is a momentum product. They make much more money (per phone) selling other 3G devices.

What does that mean?

During the life of the contract, they make more money from the iPhone than from other smartphones. They've stated this numerous times.

The only place where they take a hit is when the phone is first sold, as that's when they have to give Apple their share.
post #19 of 92
Quote:
Originally Posted by DHKOsta View Post

iPhone data usage has forced massive capital improvements to their network, and the iPhone carries a $300-$400 subsidy from AT&T. Besides, they kick back a significant portion of the data back to Apple. Sure, they're making some money, but the business driver behind the iPhone is money for capital improvements to their network, and converting customers from other carriers. Selling an iPhone isn't nearly as profitable in the short term as selling those other 3G phones, though it's great business for other reasons.

You don't know the numbers. You also don't know what, if anything, they may get kicked back from data services. You're just reading the rumors and repeating them.
post #20 of 92
Quote:
Originally Posted by DHKOsta View Post

I'm having trouble understanding where you're getting lost here. I didn't say they weren't making money. I was just asserting that iPhone revenue doesn't net AT&T much cash. Those are two completely different things. I wouldn't have called it "great business" if it wasn't making money.

OK fine- I was talking iPhone's AT&T contracts and you were talking the phone device (iPhone revenue) itself. No problem.
But your post was misleading- when you say "selling an iPhone" it involves more than just selling the phone itself. The unending contract is AT&T's pot of gold.
post #21 of 92
Quote:
Originally Posted by teckstud View Post

Then you're one of the lucky ones. Count your blessings.

I've only had one dropped call since August.
post #22 of 92
Quote:
Originally Posted by Jerseymac View Post

They're just getting a free ride off of Apple. I still can't complete a phone call without it dropping.

I have been a Cingular/ATT customer for years & have very few problems-certainly no more than people I know with other carriers. Do we expect too much???
post #23 of 92
Quote:
Originally Posted by walshbj View Post

Did AT&T report what percentage of their new subscribers came over for the iPhone? They better have a good trick planned for when the iPhone goes to other US carriers.

That state in the article...

"Quarterly iPhone 3G activations totaled over 1.6*million, down from 1.9 million during the December quarter, though more than 40*percent of those activations continue to come from customers who were new to AT&T."

That means that 640k are new to AT&T for the iPhone.

Quote:
Real question: What was the last device that drove people to switch carriers in such large numbers? Apple should have some powerful leverage with AT&T.

The last device was the original iPhone. Seriously, I don't think there is one because the exclusivity contracts between handset vendor and carrier have never last long enough for this kind of migration to occur. They only seem to last a few months which will get a few people who really want the new device, but at 3 months it would target 1/8th of the people who were under contract at the time of launch, and if they knew that a device was going to come to their carrier they may have just waited. This is a new thing. People have traditionally left a carrier because they were unhappy with a carrier, now they may be willing to leave a carrier that they kind of like for one that they didn't like in the past. I know I did this from T-Mobile to AT&T with the original iPhone vowing to never go back to Cingular. I found that the coverage was good and service was great. I have a feeling that my issues with Cingular may be mostly rooted in the frustration of the phones I had at the time.
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post #24 of 92
Quote:
Originally Posted by solipsism View Post

That state in the article...

"Quarterly iPhone 3G activations totaled over 1.6*million, down from 1.9 million during the December quarter, though more than 40*percent of those activations continue to come from customers who were new to AT&T."

That means that 640k are new to AT&T for the iPhone.

He didn't mean that. He was asking what percentage of their new subscribers came from the iPhone, not what percentage of iPhone customers were new subscribers.
post #25 of 92
Quote:
Originally Posted by melgross View Post

I've only had one dropped call since August.

Surely you must be lying. All I hear on these boards is how much AT&T still sucks in NYC.

I was in the City last weekend and I had full bars on 3G the whole time. Even had good coverage in buildings. Is there any way of knowing if they moved to 850MHz?
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post #26 of 92
Quote:
Originally Posted by melgross View Post

He didn't mean that. He was asking what percentage of their new subscribers came from the iPhone, not what percentage of iPhone customers were new subscribers.

Gotcha!
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post #27 of 92
Quote:
Originally Posted by melgross View Post

I've only had one dropped call since August.

Besides that- no static? from from either end? No distortion? My poor friend in Brooklyn - every other call he makes to me - he either has to call again or it's staticy.
post #28 of 92
Quote:
Originally Posted by solipsism View Post

Surely you must be lying. All I hear on these boards is how much AT&T still sucks in NYC.

I was in the City last weekend and I had full bars on 3G the whole time. Even had good coverage in buildings. Is there any way of knowing if they moved to 850MHz?

I'm assuming they have, at least in a number of places.

Even when the towers were spewing out on 1900, while I had poor speeds, I only had the one drop. When it suddenly improved markedly, several months ago, everything has been running pretty smoothly.

In Manhattan, people using all services have been telling me about problems. those huge building with their massive steel frames are going to be a problem in parts of Manhattan for years to come.

I had the poorest service in my home in Forest Hills, Queens. My house was built in 1925, with heavy mortar and plaster interior walls and ceilings, using a heavy steel mesh over wood lath to hold the material. This is NOT condusive to good signal reception! The windows help, but problems have occurred. But once service improved, it stopped being a problem.
post #29 of 92
Quote:
Originally Posted by solipsism View Post

Surely you must be lying. All I hear on these boards is how much AT&T still sucks in NYC.

I was in the City last weekend and I had full bars on 3G the whole time. Even had good coverage in buildings. Is there any way of knowing if they moved to 850MHz?

It's not only on these boards but it's been reported by the press for months.
I guess everyone is lying about AT&T and not only in NYC.
And it's not just an iPhone problem. AT&T (the patch network) is poor in general.
post #30 of 92
Quote:
Originally Posted by melgross View Post

I'm assuming they have, at least in a number of places.

Even when the towers were spewing out on 1900, while I had poor speeds, I only had the one drop. When it suddenly improved markedly, several months ago, everything has been running pretty smoothly.

In Manhattan, people using all services have been telling me about problems. those huge building with their massive steel frames are going to be a problem in parts of Manhattan for years to come.

I had the poorest service in my home in Forest Hills, Queens. My house was built in 1925, with heavy mortar and plaster interior walls and ceilings, using a heavy steel mesh over wood lath to hold the material. This is NOT condusive to good signal reception! The windows help, but problems have occurred. But once service improved, it stopped being a problem.

Right- and the NY TImes and WSJ have been lying as well to sabotage the iPhone.
post #31 of 92
Quote:
Originally Posted by teckstud View Post

Besides that- no static? from from either end? No distortion? My poor friend in Brooklyn - every other call he makes to me - he either has to call again or it's staticy.

I've had noisy calls from every cellphone I've ever made calls from, no matter what network I've been using. So has everyone else I know.

I can't even attribute static to my side of the call any more than to the other end.

Sometimes the call is perfect, and sometimes not.

I can say that GSM is known for poorer call quality than calls from CDMA. This is old news. I never expected GSM to be as good, and it isn't. The same holds true for calls made on T-Mobile from my experience.

In fact, people I know who have Sprint or Verizon here, tell me that call quality in Europe is poorer there. GSM again.

GSM call quality has an artificial sound to it that CDMA calls don't seem to share.
post #32 of 92
Quote:
Originally Posted by solipsism View Post

Surely you must be lying. All I hear on these boards is how much AT&T still sucks in NYC.

I was in the City last weekend and I had full bars on 3G the whole time. Even had good coverage in buildings. Is there any way of knowing if they moved to 850MHz?


Like some of the guys here who don't even have a phone.
post #33 of 92
Quote:
Originally Posted by teckstud View Post

Then you're one of the lucky ones. Count your blessings.

Count me as another "lucky one." No dropped calls, quite happy with the service in Phoenix.
post #34 of 92
Quote:
Originally Posted by teckstud View Post

Right- and the NY TImes and WSJ have been lying as well to sabotage the iPhone.

I subscribe to both, and have read all those articles.

The fact is that I have had no real problems. That's also a fact. All the people here who say they've had no, or few problems should be believed as well. no reason to lie about it. You know me better than that.

Again, I ascribe the poorer quality of calls to GSM. My Sprint calls were more natural sounding, with less electronic buss and echo. Both of those problems are GSM problems. The iPhone itself may not have the best call quality either, from what I read.

But that's separate from dropped calls. Moving to 850 MHZ seems to help there.
post #35 of 92
Its interesting being someone who does not even use AT&T or the iPhone you argue with people who use them everyday. We all agree that AT&T is not the best, but you exaggerate the problems.

A story from the NYTimes or WSJ is not a testament of AT&T's service that shall be forever set in stone. You don't think its possible it has improved since the story was published?

Quote:
Originally Posted by teckstud View Post

Right- and the NY TImes and WSJ have been lying as well to sabotage the iPhone.
post #36 of 92
Quote:
Originally Posted by melgross View Post

I can say that GSM is known for poorer call quality than calls from CDMA. This is old news. I never expected GSM to be as good, and it isn't. The same holds true for calls made on T-Mobile from my experience.

In fact, people I know who have Sprint or Verizon here, tell me that call quality in Europe is poorer there. GSM again.

GSM call quality has an artificial sound to it that CDMA calls don't seem to share.

Cool- I always thought that but everyone keeps saying how GSM is so advanced.
But I'm like- if the quality is poor - who cares? Thanks for the info.
So then where's that CDMA iPhone that China's getting?
post #37 of 92
Quote:
Originally Posted by teckstud View Post

Right- and the NY TImes and WSJ have been lying as well to sabotage the iPhone.

1) Are any of these reports current, or the ones from last year when the iPhone first launched?
2) Do any of these reports mention any good coverage or just bad coverage all over as you have a tendency, to put it lightly, to focus on only the negative aspects of things? Even Melgross didn't say his coverage was great in all places, but he pretty much lives in a Faraday cage and has noted that his coverage has gotten better.

PS: If a comet flies close to the earth go to his house until it passes.


Quote:
Originally Posted by melgross View Post

GSM call quality has an artificial sound to it that CDMA calls don't seem to share.

Are you specially referring to GSM and CDMA or to UMTS/HSDPA and CDMA2000, as well?
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post #38 of 92
Quote:
Originally Posted by TenoBell View Post

Its interesting being someone who does not even use AT&T or the iPhone you argue with people who use them everyday. We all agree that AT&T is not the best, but you exaggerate the problems.

A story from the NYTimes or WSJ is not a testament of AT&T's service that shall be forever set in stone. You don't think its possible it has improved since the story was published?

Anything is possible - even you being logical. I'm so glad you're the spokesman for everybody. Apparently there are some that would say otherwise about AT&T - not all as you suggest. That is much more interesting.
Did I say it was set in stone? No. But the attached article from March 13th would hardly suggest that I was being unreasonable. http://www.nytimes.com/2009/03/14/te...y/14phone.html

And if it has been improved since then - I wonder why it hasn't been reported?
Must be me- I forgot.
post #39 of 92
Quote:
Originally Posted by solipsism View Post

1) Are any of these reports current, or the ones from last year when the iPhone first launched?

I have provided you this link like how many times?? from March 13th, 2009. Why haven't you read it?
I not only talk the talk, I provide the chalk.

http://www.nytimes.com/2009/03/14/te...y/14phone.html
post #40 of 92
Quote:
Originally Posted by teckstud View Post

Cool- I always thought that but everyone keeps saying how GSM is so advanced.

Who says that? GSM has issues that CDMA doesn't, like the soft-handoff that allows you to be on CDM2000(3G) network for data while making a call in CDMA(2G). That was never part of the GSM spec so an UMTS/HSDPA(3G) phone on that network will make calls in 3G, thus using more battery life while making a call. But that doesn't mean that GSM and UMTS/HSDPA are a bad choice for Apple. I think it's the best choice because the only other real option would be Sprint, not Verizon.

Quote:
So then where's that CDMA iPhone that China's getting?

You mean that rumored WiFi-less, 3G-less device that you'd have to pay double for to get shipped to the US so you can use in on Verizon with slow data speeds?
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