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by nikhilawareness on Jan 26, 2012
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AT&T Inc. posted a large quarterly loss as it took a $4 billion charge for its failed T-Mobile USA takeover bid, and the phone giant continued to lag rival Verizon Wireless in the race to add new ...
AT&T Inc. posted a large quarterly loss as it took a $4 billion charge for its failed T-Mobile USA takeover bid, and the phone giant continued to lag rival Verizon Wireless in the race to add new subscribers.The carrier added 717,000 customers with long-term contracts in the fourth quarter, a 79% jump from a year earlier, on the strength of 7.6 million iPhone activations and 9.4 million smartphone sales overall.But AT&T is adding fewer new customers than rival Verizon Wireless, which added 1.2 million contract subscribers in the same period. Most of AT&T's iPhone and smartphone sales are going to existing subscribers.Excluding one-time items—notably the cost of handing over $3 billion in cash and $1 billion in wireless airwaves to T-Mobile parent Deutsche Telekom AG after the merger deal crumbled—AT&T posted a profit of 42 cents a share, down from 55 cents a year earlier.Experience WSJ professionalEditors' Deep Dive: Tech Titan Battle WatchWARREN'S CONSUMER ELECTRONICS DAILYVerizon Reports Loss, Eyes FiOS CompetitionPC MagazineHow AT&T's Spectrum Transfer Will Help T-Mobile CustomersWireless NewsSprint Enhances 3G Network in IndianapolisAccess thousands of business sources not available on the free web. Learn MoreAfter pulling its $39 billion T-Mobile bid, AT&T will need to focus on the rollout of its fourth-generation mobile network to keep pace with Verizon Wireless. AT&T's 4G LTE network covers just over a third of the number of Americans as its competitor and is growing more reliant on Apple Inc.'s iPhone, which operates only on 3G networks, to draw long-term customers.Like Verizon, AT&T's wireless profit margins suffered due to high outlays for subsidizing the iPhone and other handsets upfront in exchange for two-year customer commitments. The carrier reported its wireless service margin, not including some expenses, fell to 28.7%, from 37.6%. The fourth-quarter margin was 23.7% at Verizon Wireless.MoreHeard on the Street: Old iPhones May Ring Bells Deal Journal: Breakup Fee Leads to Tax Break AT&T lifted average revenue per contract customer by seven cents to $63.76. That could rise further after AT&T lifted the price of data plans this month for new customers by $5, which it said was necessary to reflect higher average data usage.Late last year, AT&T walked away from its deal for T-Mobile after battling for nine months against resistance from the Justice Department, Federal Communications Commission, state attorneys general and some competitors. The companies said they would enter a seven-year roaming agreement and seek new ways to bolster their cellular networks.AT&T reported a loss of $6.68 billion, or $1.12 a share, compared with a profit of $1.09 billion, or 18 cents, a year earlier. Revenue jumped 3.6% to $32.5 billion, ahead of analyst expectations of $31.97 billion.Rival Verizon Communications Inc. on Tuesday reported its fourth-quarter revenue jumped 7.7% as its Verizon Wireless venture with Vodafone Group PLC added 1.2 million wireless-contract subscribers and added 1.5 million total subscribers. Its base stood at 108.7 million connections, a 6.3% rise from a year earlier, compared with AT&T's 103.2 million users.Now ReportingTrack the performances of 150 companies as they report and compare their results with analysts' estimates. Sort by date and industry.More photos and interactive graphics AT&T was unable to contain the rate at which customers leave its network. That measure, known as churn, rose to 1.39% from 1.32% a year earlier and 1.28% in the prior quarter. Verizon pared churn to 1.23%, from 1.26% in the prior quarter.AT&T's traditional wireline business, which includes landline telephones and its U-verse cable and Internet service, continued to contract as more users opt for mobile phone service. Revenue for the business fell to $14.9 billion from $15.1 billion in the year-earlier period. AT&T brought in 208,000 new U-verse television
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