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AT&T’s catch 22 situation with iPhone 3G continues in Q4
TT Bureau |  |  30 Jan 2009

AT&T announced its Q4 results which again reflected the pros and cons of its alliance with Apple’s iPhone as emerged in Q3.

 

While AT&T’s revenues grew 2.4% from $30.35 billion last year to $31.1 billion, net profit declined by as much as 23.3 % down from $3.1 billion or 51 cents a share registered last year to $2.4 billion or 41 cents a share in Q4.

 

AT&T attributed the drop in earnings per share to foreign-exchange rates, hurricane-related charges and last but certainly not the least, subsidies passed on to offer iPhone 3G. The three factors collectively pulled down the profit by 7 cents.

 

“Despite the economic environment, we grew revenues in 2008, and I expect 2009 will be another year of overall revenue growth and solid progress for our company,” said CEO Randall Stephenson.

 

In terms of business segments, the wireless division performed well. Net income from this division reached $2.62 billion at a yearly growth rate of 39%. The division added 2.1 million subscribers in Q4, 1.9 million coming from its bundled offering with iPhone 3G. On a yearly basis this addition is at a 22% decline.

 

The company reported a 3.9% ARPU growth in its postpaid wireless segment, to $59.59. Postpaid data ARPU grew 35.7% compared to the year-earlier period. AT&T claims that ARPU from iPhone 3G subscribers turns out to be 1.6 times the total ARPU for the company.

 

The company’s performance was also pulled down by its struggling wireline division. Net income fell 18.6%, to $2.35 billion from $2.89 billion last year. Voice wireline revenue fell 10%, bringing in $9 billion for the fourth quarter of 2008, compared to $10 billion last year.

 

The company is also focusing on its triple play U-verse service which offer telephone, television and Internet on a single connection. It claims 264,000 subscribers were added for the service in Q4 taking the subscriber base for the services to over one million.

 

The company announced that it will cut its capex in 2009 by 10-15%. It expects the growth rate to be in single digits for 2009.

 

For the full year, the company posted net income of $12.87 billion, up 7.7% from $11.95 billion in 2007. Revenue reached $124 billion, up 4.3% from $118.9 billion in 2007.

    
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30 Jan 2009(IST)  
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