Feature Article

July 23, 2013

AT&T Growth Lead by Mobile, Fixed Network is Flat

AT&T’s second quarter 2013 results were lead by the mobile business, which generated 54 percent of total AT&T revenue in the quarter.

Wireless revenue was up 5.7 percent, year-over-year. Wireless data revenue grew 19.8 percent, year-over-year. But the fixed network business always is closely watched, given the diminution of the voice business, and the need to prevent the fixed network business from shrinking, or declining too fast.

In that regard, AT&T fixed network results were essentially flat, at $14.8 billion down 0.9 percent year-over-year but up 0.8 percent sequentially. Many tier one service providers would be happy with such fixed network revenue results.

As planned or hoped for, AT&T is growing its broadband U-verse revenue at a fast clip, replacing declining voice revenue. In fact, U-verse revenue was up 30.1 percent year-over-year and up 9 percent sequentially.

AT&T's wireline operating income of $1.6 billion was down 15.8 percent year over year and flat sequentially. Second-quarter wireline operating income margin was 11.1 percent, compared to 13.0 percent in the year-earlier quarter, but flat versus the first quarter of 2013.

U-verse now drives 51 percent of consumer segment revenue. Revenue from residential customer services totaled $5.6 billion, an increase of 2.4 percent versus the second quarter a year ago and up 1.8 percent versus the first quarter of 2013. U-verse, which includes TV, high-speed Internet and voice over IP, now represents 51 percent of wireline consumer revenues, up from 41 percent in the year-earlier quarter.

Consumer U-verse revenue grew 28.4 percent year-over-year and was up 8.2 percent compared to the first quarter of 2013.

Total wireline broadband average revenue per user was up nine percent year-over-year.

Total revenue from business customers was $8.9 billion, down 2.2 percent versus the year-earlier quarter and up slightly compared with the first quarter of 2013. Business service revenue declined 2.1 percent year-over-year.

The point is that growth is driven by mobile services, but it also is important to prevent erosion of fixed network revenue. AT&T is doing so.

Edited by Rachel Ramsey

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