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Jan. 29, 2010

AT&T Mobility says that it added almost 2.7 million subscribers to its wireless network during the final three months of last year, further tightening the size difference between the industry’s No. 1 and No. 2 players.

Just two days ago, Verizon Wireless reported that its mobile services division added over 2.21 million new subscribers to its network during the same period.

The numbers are an almost 80 percent improvement compared with the 1.25 million new customers it added during the fourth quarter of 2008.

AT&T added that about 1.8 million of its net customer additions during the quarter were through third-party partners. Factoring out such channels, Verizon Wireless managed to add more direct customers posting gains of 1.2 million net customers during the quarter compared with AT&T Mobility’s 910,000 direct new customer additions.

AT&T Mobility ended the year with about 85.1 million customers on its network, compared with 91.2 million subscribers for Verizon Wireless.

Also pushing some of that growth was the continued reliance on Apple's iPhone that analysts said continues to make up a large portion of AT&T’s customer additions and pressures on its overall profit margins.

AT&T Mobility said it activated a little over 3.09 million iPhones during its 2009 quarter. The wireless carrier forks out several hundred dollars in handset subsidies for each iPhone sold however, which it looks to make up over the term of a contract in mandatory data charges.

AT&T Mobility reported that iPhones account for approximately 18 percent of its overall mobile customer base and about 23.6 percent of its postpaid base.

In general, Smartphones represented a little over 45.9 percent of MIDs (mobile Internet devices) on AT&T’s network as of Dec. 31, 2009.

Looking to make good on some users that complain over insufficient network capacity, AT&T said it plans to boost capital expenditures up to 10 percent this year, with an expected $2 billion increase targeting its wireless network and backhaul capabilities.

Overall, those upgrades include a three-times increase in the amount of fiber to cell towers compared with last year, expanded deployment of Ethernet-based backhaul capabilities, the addition of about 2,000 new cell sites, and specific plans to improve network capacity and throughput in New York and San Francisco, two markets targeted by critics as having some of the worst mobile network congestion issues.

AT&T’s overall profit margins stood at a little less than 38.9 percent during the fourth quarter, which was ahead of the 38.3 percent posted in the previous quarter, but well behind the mid-40 percent posted by Verizon Wireless.

Helping improve AT&T Mobility’s 27 percent year-over-year rise in customer additions was a drop in customer churn from 1.65 percent during the fourth quarter of 2008 to 1.43 percent in 2009.

The strong increase in the sales of smartphones also helped push AT&T Mobility’s data revenues up 15 percent year-over-year to $15.56 per user during the fourth quarter, while postpaid average revenue per user increased 2.6 percent to $61.13.

AT&T’s total revenues rose by 7.6 percent year-over-year from $12.9 billion during the fourth quarter of 2008 to $13.8 billion last year, and full year revenues were up about 8.54 percent from $49.3 billion to $53.6 billion.

For its part, Verizon Wireless says that most of its sales increase for the fourth quarter of 2009 was mostly through resale partners as the wireless carrier’s retail customer growth inched up only slightly year-over-year to 1.234 million net new customers.

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Source: AT&T.