As expected, wireless and broadband additions dominated AT&T’s third quarter. Like the second quarter before it, the third quarter posted the highest net gain in post paid retail wireless subscribers in AT&T’s history, with 1.7 million net additions. The net adds are being driven by the iPhone, with 2.4 million iPhones being activated in the third quarter, 40% of whom were new subscribers to AT&T. iPhones are also driving huge growth in wireless data revenue, which grew by 50% in the third quarter. AT&T U-verse is growing at a decent clip as well, with 232K new subscribers. AT&T reports 781K total U-verse subs, and feels confident they will exceed their 1 million subscriber goal by year end 2008. We’ll need to review these results in more detail, but here are a few initial interesting observations worth noting:
- Dramatic Increase in DSL Growth – AT&T added 149K new consumer broadband subs in 3Q08, compared with 34K in 2Q08. This dramatic increase will need to be analyzed further, as well as compared with other DSL providers to see if we’re starting to see a reversal in the slowdown of DSL subscriber growth witnessed over the past couple quarters.
- IP Derived Data Revenue Growth – IP data services now account for 44% of all data revenue. Consumer IP revenue, driven by U-verse, grew by 19%, and business IP revenue grew by 14.9%.
- New Combined Broadband Metric – AT&T announced that they will begin to combine both wireline and wireless broadband counts into a single metric as recognition of wireless broadband growth and relevancy. “In recognition of this trend, AT&T now also provides data on total broadband connections, which combines wireline and wireless subscribers.” Using this new metric, AT&T counts 20.7 million total broadband subscribers (wireless broadband connections include data users with 3G LaptopConnect cards and broadband-speed integrated devices with a QWERTY or touch-screen keyboard).
- Wireline Voice Decline Continues – AT&T lost 1.02 million wireline voice connections in 3Q08, compared with 967K in 2Q08.