YOU ARE AT:CarriersStrong iPhone sales not enough to bolster AT&T Mobility in Q3

Strong iPhone sales not enough to bolster AT&T Mobility in Q3

While rival Verizon Wireless surprised analysts with a robust third quarter, AT&T Mobility surprise many by falling short on a number of operational metrics during its most recent fiscal quarter.

AT&T Mobility posted 678,000 net customer additions during the third quarter, which was less than one-third the more than 2.1 million net additions posted during the third quarter of 2011. The drop was spread across all of the carrier’s various segments, though analysts were quick to point out the most significant being the decline in postpaid net additions from 319,000 customers last year to just 151,000 postpaid net additions this year. Analysts were expecting the carrier to post in excess of 300,000 postpaid net additions during the most recent quarter.

From a competitive standpoint, AT&T Mobility’s numbers pale in comparison to the more than 1.7 million direct net additions posted by Verizon Wireless, which was nearly double the 968,000 customers the carrier added during the third quarter of 2011.

AT&T Mobility did report that it sold 4.7 million Apple iPhones during the third quarter, which was well above the 3.1 million iPhone sales posted by Verizon Wireless, though lower than forecasts. AT&T Mobility blamed the shortfall on supply constraints, hinting that consumer demand for the product and its higher-than-average subsidy remains fever pitched. By comparison, AT&T Mobility sold just 1.4 million smartphones that were not from Apple during the quarter.

Also impacting customer growth was an increase in customer churn, which inched up from 1.28% last year to 1.34% this year.

Overall average revenue per user also took a hit, falling from $47.70 last year to $47.09 this year, though postpaid ARPU did increase a substantial $1.51 to $65.20. Data ARPU also posted a strong gain, climbing $2.20 year-over-year to $20.97.

AT&T Mobility also reported that it spent $2.7 billion on capital expenditures during the quarter, which was more than it had spent during any quarter this year as well as more than it spent during the third quarter of 2011. That extra spending seemed focused on the carrier’s LTE network, which at the end of the third quarter reached 135 million potential customers. While still well below the more than 200 million pops Verizon Wireless covers with its LTE network, AT&T Mobility did note that it was on track to double pop coverage this year.

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