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From: John Navas on 23 Jul 2010 03:32
AT&T Inc. reported a 25% increase in second-quarter profit Thursday,
helped by strong wireless growth and a sharp cost reductions.

The Dallas-based company added 1.6 million wireless connections to top
90 million connections for the first time, and it activated a record 3.2
million iPhone accounts. AT&T, Apple Inc.'s exclusive U.S. distributor,
got a boost late in the quarter from the release of the iPhone 4.

"3.2 million iPhone activations - that's huge," said James Brehm, a
mobile analyst at market researcher Frost & Sullivan.

More than half of the new connections, however, involved nontraditional
devices such as e-book readers or alarm-monitoring systems, which
generate high profit margins but relatively little revenue.

Only 496,000 new customers chose wireless-calling plans with annual
contracts. Just a few years ago, AT&T and top rival Verizon Wireless
used to sign up as many as 2 million contract customers each quarter
when the U.S. market was still in a major growth phase.

As the U.S. wireless market matures, AT&T has moved aggressively to
connect all sorts of devices to its network as a means to lift sales.
It's also signing up more mobile customers for data and Internet plans.

The effort appears to be working. AT&T upped its forecast for 2010,
saying it now expects "strong earnings-per-share growth" and higher free
cash flow compared to the prior year.

MORE:
<http://www.marketwatch.com/story/att-quarterly-net-income-jumps-25-2010-07-22>

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