Free cash flow reached a record USD 6.5 billion in the quarter, and AT&T raised its target for the full year by USD 2 billion to USD 18 billion or higher. After capex of USD 4.6 billion in Q3, AT&T said it expects the full-year figure to come in at the low end of its USD 19-20 billion guidance, while it's still ahead of schedule on its LTE roll-out, covering already more than 135 million people.
Revenues at the wireless division rose 6.6 percent year-on-year to USD 16.6 billion, driven by sales of over 6.1 million smartphones and a 4.5 percent increase in services revenues. The operator activated another 4.7 million iPhones in the period and said it also set a new record for Android and Windows phone sales.
AT&T said it was also seeing success with its new Mobile Share plans, to share data cross multiple devices. Over 2 million subscriptions were taken out in the first five weeks, and more than a third of these are on plans of 10GB or higher.
Subscriber growth was held back by limited inventory for the new iPhone, with almost all the devices going to existing customers. As a result AT&T added only 678,000 new customers in the third quarter, to reach a total 105.9 million in service. The number of customers with data-only plans or devices rose 40 percent from a year ago to 6.4 million, with 114,000 tablets sold in the quarter.
The higher hardware sales put pressure on the wireless operating margin, which fell to 26.2 percent from 29.5 a year earlier.
The wireline division managed an increase in operating profit of 2.0 percent to USD 1.9 billion, despite a 1.6 percent fall in revenues to USD 14.8 billion due to weakness in voice and legacy enterprise services. Consumer revenues were up 2.0 percent to USD 5.4 billion, the strongest growth in four years thanks to over 38 percent growth in revenues from the U-verse IP services. U-verse added 613,000 broadband subscribers in the three months for a total 7.1 million, while TV customers rose by 198,000 to 7.4 million. However, this was not enough to offset the loss in DSL subscribers.
