AT&T has reported growth in its wireless division, but experienced further declines in the fixed line sector in the fourth quarter of 2008. The company’s overall net profit for the quarter was USD2.4 billion, down 23.6% from USD3.1 billion twelve months previously. Revenue for the three months ended 31 December 2009 was USD31.1 billion, up 2.4% year-on-year. Wireless revenue rose 13.5% to USD11.5 billion, while total wireline revenue dropped 3.3% to USD17.07 billion. The company cited merger-related expenses, severance costs and upfront subsidies for the iPhone as contributing to lower income. Large declines in AT& T’s local and long distance business also played a significant role. Although the operator takes an initial hit in handset subsidies from the 1.9 million new iPhone customers it acquired in the quarter, in the long run it should generate significant profits from the higher monthly fees paid by users.
AT&T ended the quarter with 77 million mobile customers, slightly behind new market leader Verizon’s 80 million. AT&T’s churn rate remained flat at 1.2% for post-paid subscribers and was down slightly at 1.6% overall. Post-paid ARPU was up 3.9% versus the year-earlier quarter at USD59.59. The operator signed up a net 264,000 customers for its new U-Verse fibre-TV service to reach its year-end goal of one million. It had planned to reach 30 million living units by the end of 2010, but has now revised the target date to the end of 2011. AT&T added 357,000 broadband customers in the fourth quarter, including those who buy wireless aircards. In the fixed line division the number of primary consumer lines in service fell to 27.48 million from 31.01 million a year earlier.
Full-year 2008 revenue totaled USD124.0 billion, net income was USD12.9 billion and cash from operating activities totaled USD33.7 billion. AT&T issued a conservative forecast for 2009. The company has already taken steps to counter the financial downturn and has recently shed 12,000 jobs. The company has also said it will reduce its CAPEX spending on new equipment in 2009 by between 10% and 15%.