AT&T's mixed Q4 driven by iPhone mixed blessing

Overall, AT&T added 2.1 million wireless subscribers during the quarter, bringing its total to 77 million, just shy of Verizon’s 80 million post-Alltel-merger subscriber base. At 1.6%, churn was down slightly from 1.7% for both the preceding quarter and the previous year. AT&T’s total wireless revenue was up 13.2% to $12.9 billion in the quarter.

Bernstein Research senior analyst Craig Moffett called wireless the unquestionable bright spot in AT&T’s earnings this quarter. Much like Verizon, he described the results as a mixed bag, albeit one with more good than bad. Outside of just the iPhone, nearly 60% of the carrier’s postpaid net adds came in integrated devices, bringing the total number of consumers with integrated devices to 24.9%, up from 13% in the fourth quarter of 2007. In the long term, AT&T expects to generate a healthy profit due to the higher monthly data fees attached to the 3G device. The monthly subscription brings the average amount of money spent per customer each month on an annual plan to $59.59, a 3.9% increase over the first-generation handset.

“We ended the year with very good wireless momentum,” Lindner said. “We delivered the industry’s best subscriber increase at 7 million. We are seeing clear benefits from our wireless data strategy, which includes leadership in devices and our investment in the iPhone 3G.”