By the numbers

10 key facts and figures -- and the industry-altering trends behind them

The telecom industry is changing and evolving so rapidly these days, it's sometimes hard to keep up. It's also difficult to separate hype from reality and real trends from blind alleys.

For that reason, we thought we'd take a look at a (large) handful of key industry numbers, figures and metrics — hard data or at least very strong, educated guesses — to create a snapshot of where the industry is today, and where it's heading.

This industry has so many facets to it these days we could have presented a hundred different numbers and only scratched the surface or presented a partial view of reality. But we've done our best to capture the figures that stood out to us and that represented the real trends and emerging stories that are shaping our industry.

21.5% PROFIT GROWTH

Let's start our “numerical” tour of the industry with the freshest number: 21.5, or the percentage increase in AT&T profits for the first quarter of 2008. AT&T's earnings report, released April 22, was especially rosy given the overall slowness in the economy — a slowness that both AT&T and Verizon had sworn they weren't feeling yet. Given its own Q1 numbers, AT&T was telling the truth.

Going a bit deeper into AT&T's numbers literally tells the tale of the U.S. telecom industry:

• Growth came strongly from the wireless business.
• Wireless revenue grew by 18.3% (to $11.83 billion).
• Wireless subscribers grew by 1.3 million in the quarter.
• Wireless data revenue increased 57% (to $2.3 billion). Data now represents 22% of AT&T's wireless revenue, up from 16% just a year ago.
• Customers sent twice as many text messages (44 billion in the quarter alone) than a year ago.
• Eleven million AT&T customers now have 3G devices.
• Wireless ARPU — average monthly revenue per subscriber — grew by only 2%, reaching $50.18.

Wireless — not to mention enterprise — growth covered up the continued erosion of the wireline business, not an unexpected trend but one that appears to be accelerating and is still shocking to see in bold print.

For the quarter, AT&T generated more operating earnings from its wireless unit ($2.9 billion) than its wireline business ($2.8 billion). Wireless profit grew by 96%; wireline profit fell by 2%. On a per-line basis, AT&T reported its worst year-over-year access line decline ever in the first quarter: 7.7% overall and 6.9% among residential lines.

“Growth is coming from wireless, voice and data, as well as broadband,” said telecom analyst Jeff Kagan. “The traditional telephony business is not gone; AT&T still makes plenty of money on that, but it's not a growth business anymore.”

AT&T's relative strength isn't necessarily finding counterparts in the rural/Independent sector. Two of the rural telco sector's largest carriers — Embarq and Windstream — have predicted flat or declining revenues for 2008.

Bottom line: Mega-carrier AT&T appears to be making a healthy, if precarious, transition away from a reliance on voice revenue, which portends well for the entire industry, though smaller carriers face challenges. Wireless at AT&T is particularly strong, at least partially driven by the success of one shiny, new device …

WIRELESS, WIRELINE HEAD IN OPPOSITE DIRECTIONS

For Q1 2008, AT&T's wireline voice revenues fell 7.1% to $9.7 billion while its wireless revenue grew 17.1% to $10.6 billion.

Next page: IPHONE SALES, IPTV SUBSCRIBERS