NEW YORK- AT&T Corp. attributed a big boost in its bottom line to its Wireless Services’ Digital
One Rate wireless pricing plan.
AT&T said it earned $2 billion, or $1.12 per share, during the final three months of
last year, up from $1.26 billion, or 70 cents per share, in the same quarter of 1997.
Total revenues for the latest
complete quarter increased by 4.8 percent to $13.53 billion, up from $12.9 billion in the fourth quarter of 1997.
Revenue from wireless services grew by 25 percent to $1.51 billion, largely due to consumer enthusiasm for the Digital
One Rate Plan, which charges users 11 cents to 15 cents per minute regardless of where they are calling from.
Since
AT&T introduced the plan last May, the carrier has signed up more than 850,000 Digital One Rate customers. More
than 400,000 subscribers were added in the fourth quarter. Three out of every four such subscribers are new to AT&T
Wireless Services, Michael Armstrong, chairman and chief executive officer of AT&T, said.
“Wireless
showed really strong growth in the fourth quarter, about a 30-percent increase in revenues and a 90-percent increase in
net new customer additions,” he said.
“We see Digital One Rate not only as redefining where we are
coming from but also redefining the (wireless) industry from a regional, analog cellular business to a national, digital
business.”
Armstrong called Digital One Rate “the beginning of a family of offerings in the pipeline that
are coming” from AT&T.
He also told securities analysts during a teleconference last week to “assume
we will be doing more in the business arena with wireless.”
Furthermore, AT&T is looking to boost its
lagging long-distance wireline revenues by bundling various consumer services, the chief executive said.
As such,
the company plans to introduce a 60-second commercial during the Super Bowl showing consumers a way to make
their busy lives more manageable through AT&T Personal Network, a new communications package that breaks down
the pricing categories in wireless, wireline, home phone and pay phone services. AT&T is offering the same rate and
one bill for the different services.
“Voice has not seen great growth, but we will use it as the core of bundled
services. For consumers, we want to ‘de-commoditize’ long distance to increase its value share by a bundled offering
portfolio that defines service in terms of buckets of minutes that are easy to buy, simple to use and cost less,”
Armstrong said.
“If we can maintain this strategy for wired and wireless offerings, then we should be well
received in the market.”
As part of that strategy, AT&T plans to increase selling, general and administrative
expenses devoted to wireless services this year, despite ongoing efforts to reduce that overhead in other parts of the
company, he said.
