iPhone 5 pushes smartphones sales for AT&T

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The iPhone 5 helped drive smartphone sales for AT&T, as the wireless carrier reported that it sold 6.1 million smartphones during the third quarter.

During the quarter, AT&T activated 4.7 million iPhones, with 18 percent of those customers new to AT&T. Nearly 64 percent of AT&T mobile customers now have smartphones, up from 53 percent a year earlier, according to figures released by the company Thursday as part of its quarterly earnings announcement.

The 6.1 million smartphones sold by AT&T during the quarter made up 81 percent of the company’s postpaid device sales. Much of that came from the iPhone 5, available during the last 10 days of the quarter, noted Ralph de la Vega, president and CEO of AT&T Mobility. The company had large numbers of current customers buying the new iPhone during that time, he said.

“Our customer base is loyal to AT&T and staying loyal to AT&T,” de la Vega said.

AT&T reported a net increase of 678,000 in total mobile subscribers in the third quarter to reach 105.9 million.

Overall, AT&T reported revenue of $31.5 billion for the third quarter of this year, flat compared to the third quarter of 2011, while net income was up slightly to $3.6 billion.

Revenue in AT&T’s wireless division grew 6.6 percent to $16.6 billion but gains there were offset by lower revenue in its wireline division. Voice wireline revenue dropped 10.8 percent from a year ago, from $6.2 billion to $5.7 billion, the company said in a press release.

Excluding numbers from AT&T’s advertising solutions business unit, which it sold earlier this year, the company’s revenue grew 2.6 percent. Earnings per share were $0.63, beating analyst expectations of $0.60.

Net income attributable to AT&T was up 0.3 percent.

The company had strong smartphone sales and is ahead of schedule for its 4G LTE network construction, Randall Stephenson, AT&T’s chairman and CEO, said in a statement.

The company has delivered a “solid performance this year, even in a challenging economy,” John Stephens, AT&T’s CFO, said during a conference call.

AT&T’s wireless division reported a 4.5 percent increase, to $14.9 billion, in wireless service revenue. Wireless data revenue increased by more than $1 billion—18.3 percent—from the third quarter of 2011.

In its wireline division, AT&T reported revenue of $14.8 billion, down 1.6 percent from a year ago. Revenue from residential customers was $5.4 billion, up 2 percent from the third quarter of 2011. That was AT&T’s largest growth in consumer revenue in more than four years, the company said.

The company reported a 17.9 percent year-over-year growth in IP revenues from residential customers, including broadband, U-verse TV and U-verse Voice service.

Total AT&T’s U-verse subscribers, including TV and broadband, reached 7.4 million during the quarter. U-verse TV added 198,000 subscribers to reach 4.3Â million, and U-verse broadband gained 613,000 subscribers to reach 7.1Â million.

“We continue to add [U-verse] subscribers at a rapid clip,” Stephens said.

Including DSL subscriber losses, AT&T wireline broadband connections decreased by 42,000.

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