AT&T releases Q1 2011 earnings; iPhone customers not fleeing to Verizon

Wed, Apr 20, 2011

Finance, News

AT&T earlier today released its earnings from the first quarter of 2011, announcing EPS of $0.57 compared to $0.58 during the same quarter a year-ago. Q1 of 2011 also marks the first time AT&T has had to compete with another carrier carrying the iPhone, so some of AT&T’s data is particularly of interest.

AT&T notes that they activated 3.6 million iPhones during the quarter, representing a one million increase from the same quarter a year-ago. Note, though, that this number doesn’t solely include new customers, but also encompasses re-activations from customers upgrading to newer iPhone models.

One of the most important fronts in the ongoing carrier war is new subscribers. As with any business, attaining new customers is significantly more challenging than keeping current ones. In that respect, AT&T notes that 23% of all iPhone subscribers were completely new to AT&T.

Importantly, the churn rate for iPhone subscribers remained somewhat steady, indicating that initial fears that AT&T customers would flock to Verizon were perhaps overblown.

That’s certainly promising for AT&T, but the Verizon iPhone was released during January of 2011, a time when most AT&T customers were currently stuck in an ongoing service contract. The real test will come once Apple releases a new iPhone model and once enough months have passed such that a significant number of iPhone owners will be up for renewal and not tied into an AT&T contract. Remember, though, that AT&T accounted for the Verizon iPhone last Summer when it offered the iPhone 4 at a subsidized price to customers whose contracts weren’t yet up for renewal.

As for cold hard earnings figures, AT&T recorded revenue of $31.2 billion and recorded their best ever first quarter of smartphone sales with over 5.5 million.

via AT&T


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