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AT&T activates record 2.4m iPhones in Q2

updated 08:35 am EDT, Thu July 23, 2009

ATT Q2 2009 Results

AT&T today posted one of its best-ever spring quarter results credited mostly to the iPhone 3GS launch. The company says it added 1.2 million cellphone subscribers, an all-time high for spring. It adds that it activated 2.4 million iPhones between April and the end of June. The number ties that of the iPhone 3G launch quarter but is considered a record as the iPhone 3GS and $99 iPhone 3G were only available for less than two weeks in the period covered by the results.

The carrier adds that the June 19th iPhone 3GS release day was a record of its own in multiple ways. Both the company's retail stores and its website saw their best single sales days ever, eclipsing previous iPhone launch days as well as usual holiday peaks.

AT&T also attributes some of its other wireless gains to the iPhone. Its wireless data revenue jumped 37.2 percent compared to a year ago, reaching $3.4 billion; its average total revenue per user climbed slightly to $60.21, and its subscriber churn, or turnover of custoemrs leaving versus going in, reached an new low of 1.09 percent. About one third of all iPhone customers in the period were new to AT&T.

At the same time, the provider partly blamed a 12.5 percent spike in operating expenses from the iPhone 3GS launch. While these customers are ultimately expected to be more profitable than others because of their smartphone plans, the initial subsidy and other costs of adding these users has temporarily hurt AT&T's finances.

Its net income was also lower, at $3.2 billion versus $3.8 billion in spring 2008, but this was blamed in part on a "challenging" economy AT&T increasingly expects to turn as well on the previously mentioned increased costs and a a reduced dependence on older voice and data, particularly wired services. The income was nonetheless slightly higher than in the winter of this year.

The company now has a total 79.6 million cellphone customers of any kind but is still trailing behind Verizon, whose 86.6 million was achieved after acquiring Alltel earlier this year. Although many of the iPhone activations were likely to have involved existing AT&T customers, the number points to the carrier still being dependent on Apple's devices for some of its most recent gains. The iPhone producer is rumored to be in talks with Verizon and, while Apple said this week that it has an "excellent relationship" with AT&T, is expected by many to deliver a sharp blow to AT&T should it ever sell iPhones through other US carriers.

by MacNN Staff



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