Citing a 21% surge in wireless data revenues, AT&T reported consolidated Q1 2013 revenues of $31.4 billion, down 1.5 percent versus the year-earlier quarter and up 0.9 percent when excluding revenues from the divested Advertising Solutions business unit. Net income totaled $3.7 billion, or $0.67 per diluted share, up from $3.6 billion, or $0.60 per diluted share, in the year-earlier quarter.
“Our wireless network performance continues to be terrific,” said Randall Stephenson, AT&T chairman and CEO. “And that helped drive our best ever first quarter for smartphone sales, improved wireless churn and strong growth in mobile data revenues. We also posted record sales of our U-verse high-speed IP service. Across all of these areas, we’ve built a solid foundation for future growth in mobile Internet and IP broadband, which will only expand as we progress with Project VIP.”
Some highlights for Q1:
- Project VIP is ahead of schedule. Nearly 90 percent of the LTE buildout covering AT&T’s 300 million POPs will be completed by year end.
- CAPEX for 2013 is now expected in the $21 billion range. CAPEX for 2014 and 2015 are expected to be in the $20 billion range for each year, with no reduction in the Project Velocity IP (VIP) broadband expansion. Previously, the company expected capital spending of $22 billion annually in 2014 and 2015. AT&T is achieving savings through greater integration efficiencies in Project VIP, accelerating LTE build in 2013 and other ongoing initiatives.
Wireless
- Total wireless revenues, which include equipment sales, were up 3.4 percent year over year to $16.7 billion.
- Wireless service revenues increased 3.4 percent in the first quarter, to $15.1 billion. Wireless data revenues increased 21.0 percent from the year-earlier quarter to $5.1 billion. First-quarter wireless operating expenses totaled $12.0 billion, up 3.2 percent versus the year-earlier quarter, and wireless operating income was $4.7 billion, up 4.1 percent year over year.
- AT&T added 291,000 wireless subscribers in the first quarter. Subscriber additions for the quarter included postpaid net adds of 296,000. Postpaid net adds reflect 365,000 postpaid tablets added in the quarter. Connected device net adds were 431,000.
- Prepaid had a net loss of 184,000 subscribers primarily due to declines in session-based tablets and declines in GoPhone. Reseller had a net loss of 252,000.
- AT&T added 1.2 million postpaid smartphone subscribers in Q1.
- 72 percent, or 48.3 million, of AT&T’s postpaid phone subscribers have smartphones, up from 61 percent, or 41.2 million, a year earlier.
- Smartphones represented 81 percent of postpaid device sales and 88 percent of postpaid phone sales in the quarter.
- AT&T’s ARPU for smartphones is about twice that of non-smartphone subscribers, and about 90 percent of postpaid subscribers are on FamilyTalk, Mobile Share or business plans.
- About 60 percent of AT&T’s postpaid smartphone customers now use a 4G-capable device, with more than half of those using LTE devices.
Wireline
- Total first-quarter wireline revenues were $14.7 billion, down 1.8 percent versus the year-earlier quarter and down 1.8 percent sequentially.
- Total U-verse revenues grew 31.5 percent year over year and were up 5.0 percent versus the fourth quarter of 2012.
- Total U-verse subscribers (TV and high speed Internet) reached 8.7 million in the first quarter.
- U-verse TV added 232,000 subscribers, its best net gain in nine quarters, to reach 4.8 million in service. U-verse High Speed Internet delivered a best-ever net gain of 731,000 subscribers to reach a total of 8.4 million. Overall, the company added 124,000 wireline broadband subscribers, the best quarterly increase in eight quarters.
- More than 56 percent of U-verse broadband subscribers have a plan delivering speeds up to 10 Mbps or higher — up from 50 percent in the year-ago quarter.
- Total business revenues were $8.9 billion, down 3.4 percent versus the year-earlier quarter, and business service revenues declined 3.5 percent year over year. Both reflected a slow economy and weak government and business spending.
- AT&T’s most advanced business solutions — including VPN, Ethernet, hosting and other advanced IP services — grew 10.8 percent versus the year-earlier quarter. These services represent a $7.9 billion annualized revenue stream.
