AT&T earnings: E-readers, iPhone, netbooks propel wireless subscriber gains

AT&T added 2.7 million net wireless subscribers in the fourth quarter, its second-best gain in its history courtesy of e-readers such as Sony's eReader and Barnes & Noble's nook, netbooks and the iPhone. The gains put it a little more than 2 million subscribers or so behind the largest wireless carrier, Verizon.

The company's fourth quarter earnings met expectations Thursday, but what's notable is AT&T's wireless momentum. AT&T's net subscriber additions gave it 85.1 million subscribers at the end of 2009. For comparison's sake, Verizon ended the year with 87.5 million and added 1.2 net retail customers in the fourth quarter.

For 2009, AT&T added 7.3 million net subscribers. Verizon added 4.6 million. And on the churn front, AT&T had its best quarter. AT&T's 1.19 percent postpaid churn and 1.44 percent total churn is nearly on par with Verizon's tally. Verizon reported wireless retail postpaid churn of 1.06 percent with total retail churn of 1.44 percent.

AT&T's performance is more notable when you consider that Verizon's subscriber totals were boosted by the acquisition of Alltel. There are a few caveats. For instance, AT&T added 910,000 post-paid retail subscribers, which would put it below Verizon's additions. AT&T credited "rapid adoption of smartphones and emerging devices such as eReaders, netbooks and navigation devices" for its overall gains.

In addition, AT&T activated 3.1 million iPhones in the fourth quarter, its second best performance. A third of iPhone activations were for customers new to AT&T.

Verizon and AT&T reported similar quarters. Both met expectations, but didn't deliver a lot of upside surprises.

AT&T reported earnings of $3 billion, or 51 cents a share, on revenue of $30.9 billion, down from $31.1 billion a year ago. Wall Street was expecting earnings of 51 cents a share on revenue of $30.86 billion. AT&T CEO Randall Stephenson said mobile broadband has been propelling the company. "Our leadership in mobile broadband will continue to set us apart as we roll out even faster 3G speeds this year and begin deploying 4G capabilities in 2011," he said.

For 2009, AT&T reported net income of $12.5 billion, or $2.12 a share, on revenue of $123 billion. That tally is down slightly from 2008 levels.

By the numbers:

• AT&T's wireless data revenue jumped 26.3 percent in the fourth quarter to $3.9 billion.
• Emerging devices like e-readers boosted the wireless subscriber base by 1 million in the fourth quarter.
• AT&T U-verse TV subscribers jumped 248,000 in the fourth quarter to reach 2.1 million. U-verse broadband subscribers jumped 267,000 in the fourth quarter.

AT&T also reiterated that it is improving its problem areas---notably New York and San Francisco---on its network.