AT&T added a record 3.2 million Apple iPhone users on its network in Q2, helping to nearly double the number of postpaid customers using smartphones. Just over a quarter of the iPhone additions were customers new to AT&T. The net increase in 3G smartphone users in the three months was 2.9 million to 29.7 million, an increase of 98.2 percent year-over-year. Total net subscriber additions numbered 1.6 million Q2, to reach a base of 90.1 million at the end of June. The retail postpaid base grew by 496,000 to 67.0 million, of which 53.2 percent used smartphones, up from 36.3 percent a year earlier. Connected devices net adds were 896,000 in the quarter to reach 6.7 million. The growing number of smartphones led to a 27.2 percent annual increase in mobile data revenues to USD 4.4 billion, helped by a 42 percent rise in SMS volumes. Total mobile revenues increased 7.7 percent to USD 13.2 billion, with services revenues up 10.3 percent to USD 13.2 billion. This was helped by a 3.4 percent increase in postpaid ARPU versus the year-earlier quarter to USD 62.63. Mobile operating profit grew 24.7 percent to USD 4.1 billion, with the margin improving to 28.8 percent from 24.9 a year ago. The wireline division posted revenues down 3.7 percent from a year ago, the smallest decline in five quarters amid signs of stabilisation in the business market, to USD 15.4 billion. A 4.3 percent cut in operating expenses helped keep operating profit flat at USD 1.9 billion and improve the margin to 12.2 percent from 11.6 a year ago. The operator lost a net 783,000 consumer revenue connections, mainly in voice, for a total 44.3 million at end-June. The broadband base fell by 93,000 to 17.43 million, while video susbcribers increased by 159,000 to 4.558 million. AT&T's total revenues rose 0.6 percent from a year ago to USD 30.6 billion, and operating profit increased to USD 6.1 billion from USD 5.5 billion. Net profit jumped to 25.9 percent to USD 0.68 per share, including a 7 cent gain from the swap of Telmex Internacional shares. This helped the company raise its full-year outlook to strong EPS growth, improved operating margins and free cash flow above 2008 levels. AT&T previously forecast stable to slightly higher results in 2010.
