AT&T said it activated 1.9 million iPhone 3Gs in the fourth quarter. It also reported iPhone 3G activations topped 4.3 million in the second half of last year.
“I think the most important step that we took in 2008 was our iPhone 3G launch,” AT&T Chairman and CEO Randall Stephenson told investors. “In less than six months we activated more than four million units, and 40 percent of those were for new customers to AT&T.”
Strong iPhone Sales
But despite strong wireless growth, AT&T’s quarterly earnings fell to $2.4 billion, or $0.41 per share, from $3.1 billion, or $0.51 a share, in the same quarter of 2007. Still, Stephenson remained upbeat, telling financial analysts that AT&T more than doubled the number of integrated devices running on its wireless network in the past year. “The iPhone was obviously a very big part of that,” he said.
Stephenson noted that AT&T’s iPhone exclusive continues to deliver high-value subscribers, with average revenue per user approximately 1.6 times higher — and subscriber churn significantly lower — than the company’s overall postpaid subscriber base. “In simple words, what I’d tell you is that we are winning at the high end,” Stephenson said.
AT&T pays a price for its iPhone exclusivity in the United States. The subsidies that the wireless carrier paid to Apple in the fourth quarter, the company said, reduced earnings by $450 million, or five cents a share.
In the long run, however, AT&T expects to realize a significant increase in wireless margins as its iPhone 3G customer base matures. “The iPhone short-term margin pressure is proving to be just that, it’s short-term,” Stephenson said.
Best Growth Area
Overall, AT&T said revenue rose 2.4 percent year over year to $31.1 billion in the fourth quarter, driven by 13.2 percent wireless growth and a 14.2 percent increase…